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       AM ERICAN

Sustainable Development Report

Contact us

For further information, please contact:

Lorenzo Menéndez
Safety and Sustainable Development Manager

Fernando Valenzuela
Environmental and Community Manager

Marcelo Esquivel
External Affairs Manager
        AM ERICAN

Sustainable Development Report


                  Message from the CEO                                        4
                                                      Scope                   6
                              Company Profile                                 7
            Energy Efficiency Programme                                      33
                                         Our People                          41
           Safety and Occupational Health                                    51

              Environmental Performance                                      61

                        Social Performance                                   79

                  Economic Performance                                       87

               Targets and Commitments                                       93

                                         Appendix 1                          97

                                         Appendix 2                          98

           Global Reporting Initiative Index                            100


                                                                 Message from
                                                                 the CEO

                                                                 Global warming and its direct effect on climate change
                                                                 not only has scientists concerned but also companies and
                                                                 the international community. Most experts believe that the
                                                                 concentration of greenhouse gases in the atmosphere, mainly
                                                                 due to human activity, is causing changes to the weather. If
                                                                 suitable measures are not taken to redress this situation right
                                                                 now, computer-based forecasts augur a complex outlook.

                                                                 The Kyoto Protocol, the Stern Report, and more recently the
                                                                 report of the Intergovernmental Panel on Climate Change of
                                                                 the United Nations, all concur that the earth’s temperature
                                                                 has risen, that there will be large changes to the earth’s
                                                                 physiognomy, and that we have to take action immediately to
                                                                 spur some kind of positive change for the future.

                                                                 As a way of establishing standards on this issue, Anglo
                                                                 American intends to achieve a demanding goal: attain 15%
                                                                 global energy consumption efficiency in all its operations
                                                                 worldwide, taking 2003 as the basis and 2014 as the target.

                                                                 We are moving soundly and steadily towards achieving this
                                                                 commitment. We launched our Energy Efficiency Programme
                                                                 in 2004, in which we established targets, those accountable,
                                                                 methodologies and steps to achieve the corporate objectives.
                                                                 We then carried out a survey in each operation, with the CO2
                                                                 emissions and energy and water consumption segmented by
                                                                 process. We also defined a way of measuring this and created
                                                                 the concept of “certified reductions” We have now certified
                                                                 reductions of 2.48% in energy, 1.87% in CO2 emissions and
                                                                 2.54% in water consumption.

                                                                 At the same time, we have strived to find ways of boosting
                                                                 energy savings: we were the drivers of the creation of
                                                                 a mining panel to share experiences, and we signed an
                                                                 agreement with Honda Motor to purchase hybrid automobiles
                                                                 for the company and its employees. This endeavour earned us
                                                                 the Energy Efficiency Award of the Ministry of Economy and
                                                                 the Confederation of Production and Commerce.

                                                                                                                                 MESSAGE FROM THE CEO

Another aspect we have been especially zealous with is our       have included the impacts caused by mining operations.
community engagement. We applied the SEAT in 2004, which         To cope with such impacts, we have developed operation
has enabled us to learn more about the socio-economic            closure plans; we have supported the most varied research
reality of the communities around our operations. We have        on biodiversity in the divisions where it is important for the
carried out various initiatives based on this analysis and we    life of autochthonous flora and fauna; we have implemented
will repeat this process in 2007-2008. We will then know         recycling initiatives and we have backed various community-
whether we have achieved tangible progress.                      focused activities, among other actions.

Moreover, in the 2005 report we informed about the decision      I am convinced we are on the right track, but we can do even
to assign US$3 million for the establishment of a rotating       better with the effort of not only Anglo American but also the
fund to promote enterprise and social development. This was      support and collaboration of our neighbours, the authorities
materialised with an initiative called the “Emerge” Programme,   and everyone involved in our operations. I am confident that
which entails direct work with small-sized companies and         working as a team we can leave a legacy of a better world for
also indirect support to local entrepreneurs through the         future generations.
“Fondo Esperanza” micro-credits foundation.

The project will initially help over 1,800 entrepreneurs from
the provinces of Quillota, San Felipe and Chacabuco over the
next two years by means of an investment of US$500,000.
The goal is to reach 6,700 entrepreneurs in three years with a
total investment in the order of US$2.5 million.

With regard to our workforce, Anglo American believes
that safety is a core value. We have the moral obligation of
assuring a risk-free workplace for our own and contractor
employees. As a result of the initiatives undertaken, the
total LTIFR was 0.34 in 2006 and the average contractor
accidents rate dropped from 0.85 to 0.38 in two years. This
is an achievement we would like to share, but it is no reason
to relax in our search for the corporate goal of “Zero Harm.”
A management system called the Anglo Safety Way was
also developed in 2006, which was drawn up based on the
best practices in the industry and on renowned international                                                                 Pieter Louw
standards like OHSAS 18001.                                                                                                          CEO
                                                                                                                     Anglo American Chile
As in previous reports, our third sustainable development
report presents a balanced vision of our financial,
environmental and social performance, and this time we

                                                                                         SUSTAINABLE DEVELOPMENT REPORT   ANGLO AMERICAN CHILE      5

The third sustainable development report of Anglo American          in Spanish and we have made a digital English version. To
Chile outlines the economic, social and environmental               facilitate access, we have included the contact names, should
performance of all its divisions, i.e., Los Bronces, Mantos         you wish to have a copy. The document is available on the
Blancos, El Soldado, Mantoverde and the Chagres Smelter,            website of Anglo American Chile ( where it is
plus the corporate offices in Santiago. Moreover, it includes the   possible to review all the reports issued by the company.
financial and production information of its stake in Compañía
Doña Inés de Collahuasi, when relevant and where it is
expressly stated. It includes the performance from January 1 to
December 31, 2006, and information from 2004 is considered
to meet the principles of comparison and clarity. We have
also considered information from previous periods, whenever

As last year, we have included a special chapter on our Energy
Efficiency Programme with a commitment of raising energy
efficiency by 15% by 2014. This programme also envisages
targets to improve the efficiency of water usage and a
reduction of CO2 emissions.

We will also touch on some issues addressed by our Good
Corporate Citizenship principles, which were included in the
two previous reports and are now available on the company’s

The structure this year is a synthesis between the 2002 Global
Reporting Initiative (GRI) guidelines and the G3, which is
the new generation of GRI indicators. We have also included
the explanations and indicators of the Mining and Metals
Supplement of the GRI and the Guide to Communication on
Progress of the Global Compact. The most important community
concerns, according to the socio-economic assessment toolbox
(SEAT) process (see pages 28 and 81), are addressed in more

To draw up this report and ensure the impartiality of the
information and abidance by the GRI guidelines, we hired the
services of an external consultant, which was in charge of
collecting the information and advising us on how to present
it. 40 internal and external documents were reviewed for this
(see page 98) and 15 interviews were held of vice-presidents,
managers, and various area heads. This was to guarantee
the document verification principle. Regarding this, the data
of the Los Bronces Division was audited by KPMG during
the corporate reporting audit of Anglo American plc, and the
financial information was analysed by the external auditors
Deloitte & Touche. Their opinion was published in the 2006
Annual Report.

The financial information is stated in US dollars, unless
indicated otherwise. Lastly, we have printed 1,500 copies


“How can trust be built between
companies, NGOs and the public at
large? One way is through very open
reporting on standardised indicators
such as those developed by the Global
Reporting Initiative (GRI).”
Sir Mark Moody-Stuart
Anglo American plc


Anglo American plc                                                                      Accolades
Anglo American plc is a global leader in mining focused on adding value for
shareholders, customers, employees and the communities in which the Group               In February 2006, the UK Association of
operates. It owns a well-diversified range of high quality assets covering gold,        Chartered Certified Accountants (ACCA)
platinum, diamonds, coal, ferrous and base metals, industrial minerals and paper and    awarded Anglo American plc the Best 2005
packaging.                                                                              Sustainability Report.

It had sales of US$38,637 million and earnings of US$5,471 million in 2006, with
Chilean mining operations accounting for 35%. Anglo American plc has over 64            Furthermore, in the 2006 Global Accountability
operations on the 5 continents and it employs 195,000 people.                           Report on accountability and transparency
                                                                                        published by One World Trust, the company
Its head office is in London and its shares are mainly traded on the London stock       was one of the two multinationals (out of 10)
exchange, and on the financial markets in South Africa, Switzerland, Namibia and
                                                                                        that obtained over 50% in the “Participation,
Botswana. In 2006, it maintained its STOXX European regional index and obtained a
second place ranking on the Dow Jones Sustainability Index (DJSI) with a score of       Response and Assessment, and Compliance”
84%, compared with an industry average of 57% and the highest being 86%.                categories, regarding the presentation of
                                                                                        information and response to external requests
The group strives to attain world-class performance in all its business areas through
the following divisions:

•   Anglo Platinum.                                                                     Chile’s importance for the
•   Anglo Diamonds.                                                                     Group based on 2006 earnings
•   Anglo Gold.
•   Anglo Coal.
•   Anglo Industrial Minerals.
•   Anglo Ferrous Metals and Industries.
•   Anglo Paper and Packaging.
•   Anglo Base Metals.                                                                            Chile


                                                                                                                 ANGLO AMERICAN PLC COMPANY PROFILE

Safety is been adopted as a core value for Anglo American. The small decrease in
fatalities in 2006, amounting to 44 (46 in 2005), is a top concern. The company
continues to strive to meet its target of “Zero Harm,” for which it created a safety
management standard based on the best international practices called the Anglo
Safety Way. This introduced annual audits of this system and concrete action plans to
improve the conditions beyond the regulation (see pages 52 and 53).

All the divisions have the ISO 14001 certification, almost a dozen operations,
including the 5 operations in Chile, have completed the SEAT community engagement
process (see pages 28 and 81), and all operations are implementing an integrated
risk management system that considers economic, environmental and social variables.

One of the major challenges has been to improve energy and water efficiency and
at the same time lower the CO2 emissions. With this aim, the company has set
demanding goals for the next few years so as to consolidate a sustainable future for
the company and future generations (see page 33).

 Importance of Anglo Base Metals based on Operating Earnings

                           2006                               2005
                                         3%                             5%
         5%                                      9%
     5%                                         5%
                                                                      25%                Cynthia Carroll
    8%                                          7%
                                                                                         On October 24, 2006, it was informed that the
              13%                                                       13%              North American Cynthia Carroll will take over
                                                                                         as the CEO of Anglo American plc effective as
                              23%                              21%
                                                                                         of March 1, 2007, to succeed Tony Trahar who
                                                                                         held this office for six years. This is the first
                                                                                         woman to take the helm of this multinational
                                                                                         and the third in the history of a FTSE 100
          Anglo Base Metals                                                              company, which is a category of the one
          Anglo Platinum                                                                 hundred most highly capitalised companies
                                                                                         listed on the London Stock Exchange. She
          Anglo Ferrous Metals and Industries
                                                                                         studied geology at Kansas University and
          Anglo Coal                                                                     holds an MBA from Harvard. One of her first
          Anglo Paper and Packaging                                                      activities was to come to Chile in January
                                                                                         2007 when she visited the Los Bronces Division
          Anglo Gold
                                                                                         and Chagres Smelter, and held meetings with
          Anglo Diamonds                                                                 representatives of the Chilean mining industry
          Anglo Industrial Minerals                                                      and government authorities.

                                                                                        SUSTAINABLE DEVELOPMENT REPORT   ANGLO AMERICAN CHILE     9

Anglo                                                                                                        Anglo American’s
                                                                                                             strategy is
American Chile                                                                                               focused on
Anglo American Chile is part of the Base Metals Division. It is the third largest mining
company in Chile regarding production and one of the largest global copper companies.
                                                                                                             generating long-
Its 2006 earnings, including the stake in Minera Collahuasi, amounted to US$4,403
million, and increased 67% on those in 2005.
                                                                                                             term value for
The divisions operated by Anglo American provide direct jobs for 2,505 employees and
                                                                                                             its shareholders,
indirect jobs for 3,118 contractors. Collahuasi has an approximate headcount of 2,500
The company has been present in Chile since 1980 and operates five divisions. Four of
                                                                                                             employees and
them (Los Bronces, Mantos Blancos, El Soldado and Mantoverde) are engaged in the
exploration, mining, processing and marketing of copper concentrate and cathodes. Los
                                                                                                             the communities
Bronces also produces and markets molybdenum and the Chagres Smelter produces                                in which it
anodes/blister and sulphuric acid.
Anglo American operates the five divisions through Empresa Minera de Mantos
Blancos S.A. and Minera Sur Andes Ltda. It also has a 44% stake in Compañía Minera
Doña Inés de Collahuasi. The financial and production information of Anglo American’s
interest in Collahuasi is presented in this report. However, all the other indicators only
refer to the 5 divisions operated by Anglo American, as Collahuasi draws up its own
sustainable development report.

  2006 Concentrate Sales Breakdown                                                           2006 Anode Sales Breakdown

                                                                                                    USA                   USA (Phelps Dodge)
                                       Brazil                                                      22.4%      Chile
                                                                 Chile / Codelco y Xstrata                                Chile (Codelco)
                                       30.3%                                                                 29.8%
                                                                 China / Traders                                          Mexico (Cobre de México)
                                                                 Brazil / Caraiba Metals                                  Belgium (Cumerio)
                     Chile                                                                        28.6%     Belgium
                    60.6%                                                                                   19.2%

                                                                                                                         ANGLO AMERICAN CHILE COMPANY PROFILE

 Anglo American Chile’s Customers Worldwide

                                                                       Nexans France
                                                                       Deutche Giessdraht

                              Southwire                                KME Metals
                                                                       Cumerio                                        Furukawa Electric
                              Encore Wire
                                                                       Cumerio                                        Walsin Lihwa
                              Phelps Dodge
                                                                                                                      Cheng Kuo
                              Cobre de México

                                          PPE Invex
                                          Codelco - Las Ventanas
                                          Codelco - Las Ventanas
  Sulphuric Acid

2006 Cathode Sales Breakdown                                                2006 Earnings by Product Breakdown

                              2%                         Mexico                        0.6%                4.2%
                         8%                 2%
             27%                                         France                        24.2%
                                                         Germany                                        34%                            Anodes/Blister
1%                                                       Italy
           11%                                           Japan/Korea
                              20%                                                           37%                                        Sulphuric Acid
                   12%                                                                                                                 Molybdenum
                                                         USA                                                                           Cathodes

                                                                                                  SUSTAINABLE DEVELOPMENT REPORT   ANGLO AMERICAN CHILE   11

                                                                 Copper Marketing
                                                                 Anglo American Chile markets copper from its offices in Santiago for customers
                                                                 worldwide. The products are copper cathodes, copper concentrates, copper anodes/
                                                                 blister, molybdenum concentrate and sulphuric acid (see table Operations at a

                                                                 The company produced 446,784 tonnes of fine copper in 2006 (total production
                                                                 including Collahuasi amounted to 640,393 tonnes), broken down into 288,294 tonnes
                                                                 of copper contained in concentrate (accounting for around 900,000 tonnes of copper
                                                                 concentrate), and 158,490 tonnes of cathodes. It also produced 2,549 fine tonnes of
                                                                 molybdenum and 499,243 tonnes of sulphuric acid.

                                                                 Of the total production of copper concentrates by Los Bronces and El Soldado, 70%
                                                                 goes to the Chagres Smelter (approximately 540,000 tonnes of copper concentrates)
                                                                 and to meet long-term contract demand. If there are any leftovers, these are normally
                                                                 sold in the spot market1 to traders who mostly sell it to China.

                                                                 Virtually all the concentrate from the Mantos Blancos Division is sold to Xstrata’s Alto
                                                                 Norte Smelter at La Negra in Antofagasta. If any is left over, this is sold to traders that
                                                                 mainly sell it to China.

                                                                 Anodes and blister are produced by the Chagres Smelter for four refineries, for which
Copper accounted                                                 90% to 95% of the production is set aside for Codelco Ventanas (Chile), Phelps
                                                                 Dodge (USA), Cobre de México (Mexico) and Cumerio (Belgium). Should there be any
for 56.6% of Chile’s                                             leftover, this is sold in the spot market.

                                                                 Over 158,000 tonnes of copper cathodes are sold to customers worldwide, with
exports amounting to                                             whom Anglo American develops and maintains a long-lasting relationship of trust.
                                                                 Some of the major customers are: South Wire and Encore Wire (USA); PPE-Invex
US$33,340.4 million                                              (Brazil); Cumerio (Belgium); Codelco (Germany); Thiesen (Germany); KME (Italy);
                                                                 Nexans (France); Walsin and Cheng Kuo (Taiwan); and Furukawa (Japan).
in 2006, essentially
due to its high price.                                           Product Security
This was an 82.1%
                                                                 In 2006, the audit area requested a formal “product” definition to establish the
                                                                 features and maximum limits of certain elements to meet the contracts committed.
increase on 2005,
                                                                 The high cathode purity fully meets the international certification standard. In the case
according to data of                                             of copper concentrate and copper anodes/blister, the quality is expressly laid down in
                                                                 the contracts. If production does not meet the defined standard, the product can be
the Chilean Central                                              sold to the long-term customer with its consent, or it is sold in the spot market.


1 This is the market where products are usually sold for
immediate delivery in the commercial terms of the moment.
2 Traders: Comerciantes.

                                                 ANGLO AMERICAN CHILE COMPANY PROFILE

  El Soldado
  completes the
  extended pit works

The pre-production works of El Soldado’s Extended Pit were
completed in December 2006 to guarantee the plant ore feed
and maintain fine copper production of over 70,000 tonnes
per annum and sulphide treatment of 7.6 million tonnes a year
for the next 16 years. The project entailed an investment of
US$73 million to purchase equipment, open the pit, and expand
workshops and other minor works.

The engineering phase commenced in 2004 and its main
challenge was the mining of the Risco Sur area (1,490 m.a.s.l.)
due to it being impossible to get excavators and heavy-duty
equipment into the area. To successfully complete this stage
of the project, it was necessary to strip over 20 million tonnes
of material from the high peaks of El Soldado, which were
transported to the El Sauce dump.


Operations at a Glance
Los Bronces                         It is located in the Andes mountains in                                                            2006       2005      2004
                                    the Metropolitan region 65 kilometres
                                    from Santiago. The concentrator plant                         Total copper production (tonnes)   226,020   227,268 231,554
                                    and the tailings dam are located in                           Copper concentrate (tonnes)        183,487   188,434 199,825
                                    Las Tórtolas sector, district of Colina.                      Copper cathodes (tonnes)            42,533    38,834  31,729
                                    This is the only division that produces
                                                                                                  Molybdenum (tonnes)                  2,549     2,123   1,706
                                    molybdenum, a copper by-product.
                                                                                                  C12 Direct Cost (USc/lb)              63.2       39.5      32.5

El Soldado                          It is located in the coastal mountains,                                                            2006       2005      2004
                                    district of Nogales, Fifth Region, 600
                                    m.a.s.l. There is an open-pit mine and                        Total copper production (tonnes)    68,697    66,480     68,832
                                    another underground one. It also has                          Copper concentrate (tonnes)         62,200    59,972     60,727
                                    oxide and sulphide ore treatment plants.
                                                                                                  Copper cathodes (tonnes)             6,497     6,508      8,105
                                                                                                  C1 operating cost (USc/lb)           119.0      98.2        67.3

Mantos Blancos                      The mine is 800 m.a.s.l., 45 km                                                                    2006       2005      2004
                                    northeast of Antofagasta, Second
                                    Region. It is an open-pit mine with                           Total copper production (tonnes)    91,745     87,711    94,877
                                    crushing plants, which uses solvent                           Copper concentrate (tonnes)         42,607    39,108     36,708
                                    extraction and electro-winning to treat
                                                                                                  Copper cathodes (tonnes)            49,138    48,603     58,169
                                    oxide ores. It also has a sulphide ore
                                    treatment plant that produces copper                          C1 operating cost (USc/lb)           112.1        87.1     69.4
                                    concentrate containing silver.

Mantoverde                          It is located 56 km from the Chañaral                                                              2006       2005      2004
                                    port, Third Region. It is an open-pit
                                    copper mine, with a crushing plant, a                         Copper production (tonnes)          60,322    62,000     60,111
                                    mechanised material conveyance and                            Copper cathodes (tonnes)            60,322    62,000     60,111
                                    stockpiling system, heap leaching and a
                                                                                                  C1 operating cost (USc/lb)            79.9       74.9      65.2
                                    solvent extraction and electro-winning

Fundición Chagres                   This is one of the most modern smelters                                                            2006       2005      2004
                                    in Chile and is located in Catemu,
                                    Fifth Region. Its productive process is                       Fine copper production (tonnes)    173,413   138,063 165,010
                                    undertaken by means of a flash furnace                         Acid production (tonnes)           499,243   317,870 440,514
                                    and its current processing capacity                           C1 operating cost (USc/lb)            12.4      13.5      8.5
                                    is 184,000 tonnes of fine copper per
                                    annum. The nominal sulphur capture
                                    is around 97%, which makes it one of
                                    the leading smelters in Chile from an
                                    environmental standpoint.

2 C1 cost: mine cost + plant cost + overheads + sales expenses (smelting, refining and freight).

                                                                                                                                 ANGLO AMERICAN CHILE COMPANY PROFILE

                                                                        Los Bronces
                                                                        Development Project

Anglo American Chile submitted the Environmental Impact Study         representatives attended the meetings. The main issues raised in
(EIS) of the Los Bronces Development Project in 2006, which           this process were water use and consumption, suspended dust
entails a set of new facilities to increase the ore processing        of Las Tórtolas, and traffic problems on the public road to Los
capacity from the current 58,000 tonnes per day to an average         Bronces.
of 160,000 tonnes per day at an investment of US$1.2 billion.
These modifications will raise the production of Los Bronces to       Once the Environmental Impact Study has been approved,
approximately 370,000 tonnes of fine copper.                          construction will take three to four years, and the additional
                                                                      production is therefore expected by 2011
The Los Bronces Development Project includes the construction
of new pipelines and pumping stations in the Andes mountains
and the valley. It only envisages the use of areas that have
already been intervened without affecting major environmental
assets like new rock glaciers, “vegas”3 (mountain meadows), or
others. In the case of additional water needed by the project, this
will be obtained by reallocating current usage and by process
water recirculation from the Las Tórtolas tailings dam. The project
does not include any modifications to the current facilities in the
San Francisco sector.

Operational controls and safety measures will be stepped up
to monitor compliance with the regulations and objectives set.
Moreover, the citizen participation process was carried out in
Til Til, Colina, Lo Barnechea and Los Andes from October to
December as part of the Environmental Impact Assessment               3 “Vegas” are dense or very dense herb formations, integrated by temporary surface draining
System. Mayors, councillors, opinion leaders and community              associated with saline streams or soils.

* Para mayor información sobre el Proyecto de Desarrollo de Los
Bronces es posible solicitar folletería informativa.

                                                                                                         SUSTAINABLE DEVELOPMENT REPORT   ANGLO AMERICAN CHILE    15

Key Operation Impacts
The diagram shows the key impacts of the mining operations. Anglo American reports on
its response to these impacts in the 2006 Sustainable Development Report, assuming
the materiality principle of the Global Reporting Initiative (GRI). These issues include the
risk management system (page 24), the ISO 9001, ISO 14001 and OHSAS 18001
(page 25) certifications, safety and occupational health management programmes (page
51), the energy efficiency programme (page 33), and community initiatives, including the
implementation of the SEAT (page 79).

                                                       1. Exploration                                                2. Mining Operations and
                                                       • Respect for cultural and                                    • Conservation of surface and
                                                         ethnic sensitive issues.                                      ground water resources.
                                                       • Care and protection of                                      • Guarantee the stability of pit
                                                         protected areas.                                              walls and of dump facilities.
                                                       • Respect for neighbouring                                    • Minimise dust, noise, vibrations
                                                         communities.                                                  and visual impact generation.
                                                       • Respect for hereditary                                      • Optimise the deployment of
                                                         resources.                                                    resources and manage the
                                                       • Promote and maintain close                                    impact in the closure
                                                         conservation-focused                                          processes.
                                                         relations with NGOs.

     3. Transport                                                                     4. Processing
     • Prevent equipment and                                                          • Minimise worker exposure
       traffic accidents.                                                               to hazardous substances
     • Minimise dust emissions.                                                         and other causes of
     • Optimise the use of fossil                                                       accidents.
       fuels and prevent fuel spills.                                                 • Prevent fuel and chemical
                                                                                      • Maximise the efficient use
                                                                                        of water and energy.
                                                                                      • Minimise emissions.

                                                       5. Waste                                                      6. Tailings Dams
                                                       • Minimise surface waste                                      • Contain seepage
                                                         disposal impacts.                                             of metals and other
                                                       • Control and manage the                                        contaminants.
                                                         impact caused by acid                                       • Prevent flooding and
                                                         from waste.                                                   faults.

                                                                                                                ANGLO AMERICAN CHILE COMPANY PROFILE

                               7. Water Consumption                                                    8. Workers
                               • Prevent impacts on the                                                • Guarantee safe workplaces.
                                 ground and surface water                                              • Offer convenient health
                                 quality.                                                                agreements.
                               • Maximise efficient water                                              • Assure fair labour practices
                                 use.                                                                    and opportunities for
                               • Reduce global consumption,                                              personal development.
                                 especially in overexploited

9. Communities                                                 10. Regulations & National
• Assure the ongoing                                           and International Policies
  commitment to stakeholders                                   • Promote and protect human
  to understand their                                            rights.
  concerns.                                                    • Prevent corruption.
• Contribute to economic                                       • Guarantee high ethical
  development.                                                   standards.
• Contribute to achieving                                      • Comply with the Principles of
  the millennium development                                     Good Corporate Citizenship.
  targets.                                                     • Comply with applicable
• Promote local labour                                           legislation in advance.
  and labour development

                               11. Closure and
                               • Minimise the long-term
                                 environmental and social
                               • Preserve, restore and
                                 enhance the biodiversity.
                               • Assure final sustainable
                                 land use.

                                                                                        SUSTAINABLE DEVELOPMENT REPORT   ANGLO AMERICAN CHILE    17

Good Corporate Citizenship
All the members of the organisation are governed by a document called “Good
Corporate Citizenship: Our Business Principles,“4 which sets out the commitment to
all the critical aspects of the company and it is focused on conducting the business in
an ethical and sustainable way. It addresses issues like business integrity, stakeholder
engagement, the respect of human dignity and the rights of individuals, health
protection, work safety and care of the environment. This document is embedded
in the organisation’s operation and is a guide for employees and a reference for
stakeholders, especially investors, the government, the families and communities
associated with its operations.

Different activities were used to disseminate it. The principles were included in
the two previous sustainable development reports that were delivered to the main
stakeholders. They also form part of the induction programmes and are stated in a
Welcome Manual given to those entering the company. Moreover, a clause of abidance
by these principles is embedded in the contractors and suppliers documents, who
must pledge to comply with and respect them as part of their work.

Good Corporate Citizenship: Our Business Principles
The following are the key aspects5 of Good Corporate Citizenship:

1. Anglo American as a workplace
• We propose to attract, develop and retain the services of the most appropriately
   skilled individuals.
• We require all our employees and contractors to perform their duties according to
   the highest standards of ethics and integrity.
• We will not tolerate any kind of discrimination and will promote workplace equality.
• We will not tolerate injuries to our workers and contractors and we shall carry out
   our operations pursuant to this standard.

2. Anglo American as an investment
• We believe that offering our shareholders an excellent return shouldering our share
   of social and environmental responsibilities are complementary aspects of mutual

3. Anglo American as a good corporate citizen
• We seek to make a contribution to the well-being of the communities associated
   with our operations and we are committed to abiding by the principles of
   sustainable development.
• We will fully comply with the current regulation and will not take part whatsoever in
   any corrupt or anti-competitive practices.

4. Anglo American in the business world
• We will try and establish mutually beneficial relationships with our customers,
   business partners, contractors and suppliers. We will strive for them to see us as
   their preferred suppliers and partners.

4 The complete version is available on the company website
5 The numbering indicates what the key aspects of Good Corporate Citizenship are. Some excerpts of the document are included
in this report and the complete text is available on the company website.

                                                     PRESENTACIÓN DE LA COMPAÑIA ANGLO AMERICAN PLC

The company has even transmitted
the principles of Good Corporate
Citizenship to its business partners,
contractors and suppliers. They have
pledged to abide by them and make
them part of their operations.

                                        SUSTAINABLE DEVELOPMENT REPORT   ANGLO AMERICAN CHILE    19

Corporate Governance                                                                     Anglo American
Up to December 31, 2006, the Board had 14 members, who receive no remuneration           Chile Board
for their services, made up of 7 incumbent directors and the same number of alternate
directors. All the board members are executives of Anglo American Chile or Anglo         as of December 31, 2006
American plc and they were appointed by the partners. Hence, Minera Sur Andes
Ltda. and Empresa Minera Mantos Blancos S.A. designated three incumbent and three
alternate directors each, and both companies jointly appointed a seventh incumbent       INCUMBENT                 ALTERNATED
director and his alternate.                                                              DIRECTORS                 DIRECTORS

The administration and use of the trade name Anglo American Chile Ltda.                  Peter Smith               Robert Cunningham
corresponds to the partners through the Board, who meet as many times as necessary
                                                                                         Pieter Louw               John Dyer
to evaluate the company’s performance according to the articles of association. Some
of the issues they review are the investment plan, monthly and annual results, new       Felipe Purcell            Lorenzo Menéndez
projects, the disposal of real estate, and the company’s businesses, among others.       Simon R. Thompson         Alejandro Mena
All the Board meetings and decisions are recorded in the Board Book and any
modification to the articles of association is registered in the Commerce Registry and   Brian Beamish             Jorge Betzhold
published in the Official Gazette.                                                       Mike John Gordon          James Edward Beams
                                                                                         Miguel Angel Durán        Eduardo Muñoz
The company holds a full accounting system, issues an annual report, balance sheet
and financial statements that are reviewed by external auditors each year. Deloitte &
Touche were the auditors in 2006.

                                                                                                    ANGLO AMERICAN CHILE COMPANY PROFILE

Good Corporate Citizenship:
Business Ethics and Integrity

•   We support free enterprise as the system best able to contribute
    to the economic welfare of society as well as to promote individual
    liberty. Without profits and a strong financial foundation, it would
    not be possible to fulfil our responsibilities to shareholders,
    employees, society and to those with whom we do business.
    However, our investment criteria are not solely economic. They also
    take into account social, environmental and political considerations.

•   We will comply with all laws and regulations applicable to our
    businesses and to our relationships with our stakeholders.

•   We are implacably opposed to corruption. We will not offer, pay or
    accept bribes or condone anti-competitive practices in our dealings
    in the marketplace and will not tolerate any such activity by our

•   We prohibit employees from trading securities illegally when in
    possession of unpublished price-sensitive information.

•   We require our employees to perform their duties conscientiously,
    honestly and with due regard for the avoidance of conflicts
    between any personal, financial or commercial interests and their
    responsibilities to their employer.

•   We will maintain high standards of planning and control to: identify
    and monitor material risks; safeguard our assets; and to detect
    and prevent fraud.

•   We will promote the application of our principles by those with
    whom we do business. Their willingness to accept these principles
    will be an important factor in our decisions to enter into, and
    remain in, such relationships.

•   We will encourage employees to take personal responsibility for
    ensuring that our conduct complies with our principles. No one will
    suffer for raising with management, violations of this policy or any
    legal or ethical concern.

                                                                            SUSTAINABLE DEVELOPMENT REPORT   ANGLO AMERICAN CHILE    21

Anglo American Chile’s organisational structure is focused on striving for
and achieving efficiency by means of teamwork between the corporate
staff units and the operating divisions. This model has been applied since
March 2005.

     From left to right:
     Jorge Betzhold, Felipe Purcell, Lorenzo Menéndez, John Dyer, Miguel Angel Durán, Pieter Louw and Alejandro Mena.

                                                                               Pieter Louw

                                                                                                                               Senior Safety
     Senior VP                          VP Finance                    Senior                  VP            VP Marketing      and Sustainable
     Projects &                              &                           VP                 Human            & External        Development
 Technical Services                    Administration               Operations            Resources            Affairs           Manager
   Jorge Betzhold                        John Dyer               Miguel Angel Durán     Alejandro Mena      Felipe Purcell   Lorenzo Menéndez

                    Los Bronces                      Mantos Blancos            El Soldado          Mantoverde         Chagres Smelter
                  Division General                   Division General       Division General     Division General     Division General
                      Manager                            Manager                Manager              Manager              Manager
                   Marcelo Cohen                       Alvaro Aliaga        Giancarlo Bruno        Carlos Flores       Marcelo Glavic


To guarantee the sustainability of the business, Anglo American Chile bears in mind
strategic variables like the reduction in operating costs, the strengthening of ties of
trust with the communities and the authority, the boosting of the organisational culture,
and the implementation of initiatives to lower and control environmental impacts. All
this is to meet its vision of “building one of the most valued and respected copper
businesses in the world.”

Up to 2005, the Anglo American group used the Turnbull Guides as a management
tool to assess these variables. As of 2006, a framework for integrated risk
management (IRM) started to be implemented, whose objective is to incorporate this
concept in all the processes of the divisions of Anglo Base Metals and embed it in
a culture based on continuity, proactivity, management, and systematic evaluations.
This scheme formalises roles, those accountable, metrics and performance indicators
and considers 17 significant variables for the processes, like the foreign exchange
rate, commodity price, labour relations, safety, occupational health, environment, social
performance, policies, regulations, reserves and resources, operating performance,
capital projects, acquisitions, technology and possible risks like fire, explosions and
earthquakes, among others.

Furthermore, there are other tools to manage the diverse company processes:

• Safety and sustainable development database, which contains information on all the
  environmental, safety and occupational health variables.
• Letter of Assurance, which is an annual report that is sent to Anglo Base Metals
  with information on compliance, application and dissemination of the principles of
  Good Corporate Citizenship, labour relations, diversity, fines for bad practices and
  SEAT-related actions (see page 81), among others.
• Community engagement plans, which consider information extracted from the SEAT
  process, the community requirements, and the activities carried out by the company
  in its influence areas.
• Bubble Chart, which is a tool to define the company’s strategic supplies and to
  manage them.
• Enterprise Resource Planning (ERP), which is a management system of all Anglo
  American Chile’s processes.

The company’s vision is to build one of the
most valued and respected copper businesses
in the world.

                                                                      ANGLO AMERICAN CHILE COMPANY PROFILE

          The Mantos Blancos and Mantoverde
   divisions were the first mining operations in
   Chile to obtain certification pursuant to the
            OHSAS 18001 standard in 2004.

All the divisions have certification pursuant to the ISO 14001 and OHSAS 18001
standards, and Mantos Blancos and Mantoverde also have certification pursuant to
the ISO 9001 quality standard. In addition to undertaking the maintenance audit of
all the standards, the company upgraded to the 2004 version of the environmental
certification in 2006.

This process commenced in 1999 with the certification of Mantoverde and Mantos
Blancos with the ISO 9001 quality standard. Both divisions were also the first mining
operations in Chile to obtain the OHSAS 18001 safety certification in 2004. All the
divisions also have an integrated environmental and safety management system since
December 2005.

                                              SUSTAINABLE DEVELOPMENT REPORT   ANGLO AMERICAN CHILE    25

                                                                                                         ANGLO AMERICAN CHILE COMPANY PROFILE

Safety, Occupational Health, Environmental
and Quality Policy

Anglo American Chile is a mining company that strives for excellence in the production of copper. It carries out
its activities in a socially and environmentally responsible manner, is committed to the principles of sustainable
development endorsed by its parent company Anglo American plc, providing quality products that meet the
requirements and expectations of its customers.

To achieve this objective, Anglo American Chile undertakes continuous improvement management based on the
following commitments, encouraging its collaborators to adopt them:

•   Asignar los recursos humanos, materiales y financieros necesarios para el cumplimiento de esta política.

•   Identificar y evaluar los riesgos asociados a sus actividades e implementar las medidas de prevención y control
    necesarias, de manera de proteger la salud e integridad física de los trabajadores y contratistas que laboran
    en las divisiones, evitar o disminuir los impactos adversos al medio ambiente y los daños a la propiedad.

•   Responder en forma eficaz ante situaciones de emergencia, accidentes o incidentes que resulten de las

•   Asegurar una fuerza laboral sana, competente, responsable y comprometida, a través de la selección,
    educación, capacitación y evaluación permanente del personal.

•   Cumplir con la legislación y reglamentación aplicables y demás compromisos suscritos por la empresa
    aplicando, cuando sea apropiado, las mejores prácticas internacionales, en línea con las otras políticas de
    la empresa. Promover normas apropiadas, basadas en un sólido conocimiento científico y con la debida
    consideración de los riesgos, costos y beneficios.

•   Fomentar la conservación de los recursos naturales, a través del uso eficiente de la energía y el agua, entre
    otras medidas, manteniendo un seguimiento activo de los efectos de sus actividades en estos recursos y en la

•   Establecer objetivos, metas e indicadores para todas las operaciones y evaluar su desempeño contra esos
    objetivos y metas, incluyendo los requerimientos legales aplicables.

• Cooperar y mantener una comunicación abierta y constructiva con sus trabajadores, clientes, proveedores,
  comunidades locales, autoridades y otras partes interesadas, informando acerca de los avances en el logro de
  las metas propuestas.

•   Esta política será comunicada a todos los miembros de la organización para integrarla en sus actividades
    diarias, estará a disposición de otras partes interesadas y será revisada regularmente.

                                                                                 SUSTAINABLE DEVELOPMENT REPORT   ANGLO AMERICAN CHILE    27

The principles of Good Corporate Citizenship set out the company-defined
segmentation of stakeholders into: investors, employees, communities, customers,
commercial partners, governmental organisations and non-governmental

As commented on in a special chapter of the previous report, in 2004 Anglo American
Chile applied a socio-economic assessment toolbox (SEAT) to the communities
surrounding its operations. This enabled information to be collected about who the
major stakeholders are for the divisions and their requirements and expectations from
the company (see page 81).

Hence, each Division not only collected information to define the stakeholders in each
one of its areas but also data about their expectations.7

6 See the company website
7 All the expectations raised by the community in the SEAT were presented in the previous report. You can access the report on
the company website or by requesting a 2005 report.

The SEAT can be fully
or partially replicated
by any company that
so wishes.

                                                                                                                          COMPANY PROFILE STAKEHOLDERS

Division          Stakeholders

Los Bronces       • Neighbours of Lo Barnechea (from Las Puertas to Paso Marchant), Corral Quemado sector (16 km
                    from the facilities), Quilapilún, Til Til, Peldehue, Santa Filomena Estate and family vegetable
                  • District organisations: El Arrayán Neighbours’ Committee, Mapocho River Irrigation Committee,
                    Colina Municipal Corporation, Colina Private Corporation and Grandmothers’ Club.
                  • Borough Councils: Lo Barnechea and Colina.
                  • Schools: Colina and Lo Barnechea technical schools, San José School of Lo Barnechea, borough
                    council schools.
                  • Chilean Army (Peldehue), National Forestry Corporation.
                  • Drugs and Alcohol Commission of the Lo Barnechea Borough Council.
                  • Other companies: Aguas Andinas (and other water utilities.)

Mantos Blancos    • Neighbours who walk along the road in front of the mine site.
                  • Astronomy Community, Second Region.
                  • Borough Council of Baquedano.
                  • Educational establishments: private and state universities, industrial secondary school,
                    Don Bosco secondary school, schools.
                  • Baquedano police and fire brigade.
                  • Healthcare centres.

El Soldado        • Neighbours of Los Caleos, Collahue, Chamizal, Carretón, El Melón, Nogales, La Calera, and Quillota.
                  • District organisations: landowners at El Litre, Nogales and El Melón Neighbours’ Committees.
                  • Las Rosas Foundation and the Nogales Old People’s Home.
                  • Fifth Region provincial and regional authorities, Nogales Borough Council.
                  • Controlling authorities: National Environmental Commission, National Geology and Mining Survey,
                    National Forestry Corporation, Agricultural and Livestock Board, General Water Board, and the Fifth
                    Region Health Service.
                  • Fire brigade, police and crime investigation department of Nogales and El Melón.
                  • Native Forest Austral Centre.
                  • Other companies: Sopraval and Cemento Melón.

Mantoverde        • Neighbours of Chañaral, Diego de Almagro, and El Salado.
                  • Educational establishments: Chañaral and El Salado industrial secondary schools, universities,
                    Chañaral professional institutes.
                  • Borough Council of Chañaral.
                  • Chañaral Development Corporation, CORPROA, Chañaral Development Board.
                  • Fire Brigade and Underground Rescue School.

Chagres Smelter   • Neighbours of San José, Santa Margarita, Chagres and Lo Campo.
                  • District organisations: Irrigation Committee, Mothers’, Old Age and Handicapped People Centres,
                    sports clubs and district neighbour committee associations.
                  • Borough Councils of Catemu, Panquehue, and Llay Llay.
                  • San Felipe Governor’s Office.
                  • Catemu, Panquehue and Llay Llay police and fire brigade of the same communities plus
                  • Catemu Healthcare Centre.
                  • Controlling authorities: Agricultural and Livestock Board, Fifth Region National Environmental
                    Commission, National Geology and Mining Survey, and Aconcagua Health Service.

                                                                                         SUSTAINABLE DEVELOPMENT REPORT   ANGLO AMERICAN CHILE     29

Anglo American Chile abides by all the parent company
agreements on good environmental and social practices and
business ethics.

The most significant agreements signed include: Voluntary
Principles on Security and Human Rights, signed in 2005, whose
purpose is to provide a framework for extractive companies
to guarantee the safety of their employees and respect the
human rights of people living near their facilities; The Extractive
Industries Transparency Initiative (EITI), which promotes
transparency in the generation of employment and resources in
countries where extractive operations are carried out by means
of good practices and the creation of open debates on how to
generate and invest corporate resources.

The company became a signatory to the Global Compact 8
in June 2004, whose objective is to get organisations to
embrace its 10 principles on human rights, labour standards,
the environment and anti-corruption as an integral part of their

Anglo American plc is also an Organisational Stakeholder (OS)
of the Global Reporting Initiative (GRI)9 and Chairman Sir Mark
Moody-Stuart is a director of the GRI. He played a key role as
a panelist during the presentation of the new version of the G3
guidelines in Amsterdam, Holland in October 2006.

Anglo American plc also participates in other initiatives to
promote sustainable development practices:
                                                                      Human Rights
• Internacional Council on Mining and Metals (ICMM).
• World Business Council on Sustainable Development
• International Business Leaders Forum.                               Anglo American plc signed the Voluntary Principles on Security and Human
• Global Business Council on HIV and AIDS.                            Rights in 2005, which are mainly aimed at extractive companies.
• Global Corporate Citizenship Initiative of the World
  Economic Forum.
                                                                      The company translated the principles that same year and included them in
                                                                      the security contractor contract bases in 2006. They are also published in the
                                                                      Welcome Manual given to all new employees.

                                                                      95 security guards of the two private security companies that provide
                                                                      services to Anglo American Chile were trained on the principles in May 2006.


                                                               VOLUNTARY NATIONAL AGREEMENT COMPANY PROFILE

Voluntary National
Chilean Chapter of the WBCSD
As co-founder and member of the Chilean Chapter of the World Business Council
for Sustainable Development (WBCSD), Anglo American sponsored the sneak peak
process of the G3 guidelines of the Global Reporting Initiative (GRI), held in March
2006 in Chile. The event was attended by GRI CEO Ernst R. Ligteringen.

Clean Production Framework
The Clean Production Framework Agreement was signed in November 2000 by the
Mining Council and public sector bodies with competence in issues related to the
agreement. The objective is for both sectors to work together to apply a preventive
environmental strategy in the work processes, products, services and organisation to
raise efficiency and competitiveness, to prevent the generation of wastes at origin, and
reduce hazards to people and the environment.

                                                SUSTAINABLE DEVELOPMENT REPORT   ANGLO AMERICAN CHILE    31

Atacama Mining Cluster
The Atacama mining cluster project commenced in August 2004, with the
sponsorship of 11 mining companies in the region, articulated by the Atacama Region
Development Corporation (CORPROA ).10 Various activities have been carried out
since then to consolidate a development strategy in Atacama that transcends the life
of mining deposits. Mantoverde is Anglo American Chile’s Division that participates in
this local development activity.

The Mining Company Collaboration Committee (CCME) was established in 2006,
which is a new form of relationship for regional development. It includes those
accountable in the procurement and contract administration areas of mining
companies that belong to the Atacama Cluster, which has prioritised the homologation
of requirements and the design of a supplier certification system.

Membership is related to industry, safety and sustainable development organisations.

Industrial Sector                                       Safety              Sustainable Development           Others
National Mining                                         National Safety     Corporate Social Responsibility   Libertad y Desarrollo
Board                                                   Council             (CSR) Action
Mining Council                                          Regional Mining                                       Instituto Libertad
Instituto de Ingenieros de                              National Mountain                                     ICARE
Chile A.G.                                              Safety Commitee
Chilean-North American Chamber                                                                                Centro de Estudios
of Commerce (AMCHAM)                                                                                          Nueva Minería
Chilean-South African                                                                                         Centro de Estudios
Chamber of Commerce                                                                                           Públicos - CEP
Chilean-British Chamber
of Commerce
National Chamber of Commerce
Region II Productive
Development Corporation
Antofagasta Industrial



“Clear targets that can be measured and
monitored, like those applied by Anglo
American, help to promote and work
on this issue within the company, and
they are also transparent commitments
to the community and public sector.
This is what we need to be aware, so
we can learn from each other and
make comparisons to detect possible
improvements in operations.”

Nicola Borregaard
Country Energy Efficiency Programme

                                     SUSTAINABLE DEVELOPMENT REPORT   ANGLO AMERICAN CHILE   33

Climate Change
“Global warming will hit the GDP of world economies by 5% to 20% arising from
natural disasters and the influx of hundreds of millions of refugees due to the
climate and uprooted by the increase in sea levels. Addressing the problem would
only cost 1% of the GDP ,” 11 says the report delivered on Monday, October 30,
2006, by Sir Nicholas Stern, the former Chief Economist of the World Bank, to the
British government after more than a year of economic and scientific research.

Qualified by Sir David King, the chief scientific advisor of the British government,
as “the most detailed economic analysis every made,” the Stern Report warns about
the likely impact of climate change if the world continues its trend of “carrying on
as always,” although it also states what can be done to reduce its impact.

To prevent global warming and its effects, scientists are currently arguing that it is
necessary to reduce global greenhouse gas (GHG) emissions by 40% by 2050
compared with 1990.

Bearing in mind this situation, countries belonging to the United Nations held a
conference in Río de Janeiro in 1992 in what was known as the Earth Summit.
The United Nations Framework Convention on Climate Change12. The Kyoto
Protocol13, signed in 1997, not only rekindled the agreements signed in the Earth
Summit but also helped to establish stricter commitments to GHG emission
reductions and limits for developed countries.

     Stern Report on Climate Change

     The Stern report, whose aim was to find out the financial implications of global warming, warns that
     the current level of greenhouse gases in the atmosphere is equivalent to 430 parts per million (ppm) of
     CO2, compared with the 280 ppm before the Industrial Revolution. This concentration has caused global
     warning of over 0.5ºC and will carry on causing a 0.5ºC increase in the next few decades due to inertia
     inherent in the climate system. Even if the annual emission rate remained at current levels, the GHG
     levels would reach 550 ppm by 2050. As the annual emission rate accelerates according to fast-growing
     economies investing in high carbon infrastructures and demand for energy and transport increases, this
     level could be reached by 2035.

     Although it is not possible to predict exactly the effect of these changes on the global temperature,
     the models indicate it is highly feasible it will increase by more than 2ºC. This would cause glaciers to
     melt, raise the risk of flooding, reduce the supply of fresh water, a decline in harvests, heat waves, the
     spreading of diseases like malaria and dengue fever, besides a 15% to 40% extinction of species.

11 Stern Report:
12 The United Nations Framework Convention on Climate Change has been Law of the Republic since 1995. The 1997 Kyoto
Protocol emerged from this Convention during the third conference of members.
13 Intergovernmental Panel on Climate Change (IPCC):

                                                                                      A DEMANDING GOAL ENERGY EFFICIENCY PROGRAMME

A demanding goal:
15% energy saving
Anglo American upholds the concern expressed in the Stern report and assumes the
commitments undertaken by England and Chile regarding the Kyoto Protocol. For this
reason, as a way of strengthening its global warming standpoint, it has set a demanding
goal of achieving a 15% global energy consumption saving for the business as usual14
in all its operations worldwide from 2003 to 2014.

Business as usual implies an increase in specific energy in the mining industry due
to lower ore grades, greater transport distances, deeper pits, among other factors, in
addition to production increases.

Bearing this objective in mind, in October 2004, the CEO of Anglo American Chile
informed all its employees of the launch of an Energy Efficiency Programme.
This involved a planning process, which established targets, those accountable,
methodologies and steps to make progress with achieving the targets set in each one
of the divisions.

One of the milestones was the creation of the Energy Committee with representatives
from all the divisions to define the 2003-2014 general consumption and emission
table. “The Responsible Use of Energy” campaign was launched in November 2005
as one of the first measures, whose objective was to educate all employees about the
rational consumption of various types of energy used by the company and in daily life.

Energy Efficiency Programme Roles &
Roles                 Responsibilities

Project               • Assure programme compliance.
Leader                • Lead the work team, the meetings of the Project Committee and
                        guarantee leader training.
                      • Support studies, initiatives and execution of related projects.
                      • Co-ordinate dissemination of the project.
                      • Periodically report on the overall project status.
Division              • Assess energy and emission saving initiatives to meet the
Leaders                 division’s targets.
                      • Accountable for issuing the management reports of their divisions.
                      • Accountable for the follow-up of the targets set.
                      • Attend project committee meetings and work sessions.
Process               •   Identify energy and emission saving initiatives.
Leaders               •   Execute the project scope, investigate, and collect information, etc.
                      •   Draw up and issue documents and reports.
                      •   Attend training and work sessions.
                      •   Certify reductions of energy and water consumption and of CO2 emissions.

14 Business as usual means how the business would develop in the future if no additional activities were undertaken.

                                                                      SUSTAINABLE DEVELOPMENT REPORT   ANGLO AMERICAN CHILE    35

In order to achieve a thorough understanding about the             CO2 (tonnes of CO2 ) emissions, and reductions of fresh water
consumption of the different types of energy, the CO2              consumption (m3) as a result of initiatives beyond “business as
emissions and the water consumption, a survey and detailed         usual” and being permanent over time.
balance were made in each division, separated by productive
processes and types of energy consumed. This indicated the         Regarding this, there are reductions that are certified, potential
energy consumption breakdown to focus initial endeavours on        and to be discovered. The certified reductions are actions
the most significant.                                              carried out and certified by the Divisional Leaders and the
                                                                   Programme Leader to provide the transparency and reliability
Subsequently, a methodology was proposed comprising specific       required in this process. The potential reductions are those
control indicators in the processes so as to have a standardised   identified but which have not been materialized, and the
measurement method and clarity regarding the results obtained      reductions to be discovered are those that are essential to meet
in the different initiatives. The saving calculation therefore     the target but which have not been identified yet.
considers reductions of energy consumption (GJ), reductions of

                                                                                                      The impact of a
                                                                                                       15% reduction
                                                                                                         in the energy
                                                                                                      consumption of
                                                                                                      Anglo American
                                                                                                       plc by 2014 is
                                                                                                          equivalent to
                                                                                                    taking 1,000,000
                                                                                                   cars off the roads.

                                                                                                                   PROGRAMME PROGRESS ENERGY EFFICIENCY PROGRAMME

Energy Reduction

It was established that, with the        With the potential reductions detected,       Total
reduction certificates issued, as of     which should consider specific action         Reductions
December 2006, the global reductions     in the next few years, the following
regarding the base business (2006        reductions could be attained:
Plan) were:

 Energy (GJ)                  2.48 %      Energy (GJ)                       3.70 %         6.2 %

 Emissions (tonnes of CO2) 1.87 %         Emissions (tons of CO2)           2.79 %         4.7 %

 Water (m3)                   2.54 %      Water (m3)                        2.81 %         5.3 %

2003 – 2006 Consumption and Emission Summary

                                                     GJ                                                                    CO2

                             2003           2004              2005            2006                   2003              2004                2005               2006

Los Bronces              3,517,774      3,834,870       4,099,824       4,281,765               211,107           228,032            246,080              258,402

El Soldado               1,468,764      1,442,300       1,486,222       1,659,226                   95,708          94,452                97,161          108,175

Mantos Blancos           1,892,872      1,995,478         1,751,789     1,769,257               246,700           271,493            232,412              233,414

Mantoverde               1,308,631      1,373,730       1,345,251       1,393,071              121,098            132,178            127,813             140,890

Chagres                  1,108,956      1,071,558          961,309      1,075,386                   71,714          62,371                59,093            64,379
Santiago                    8,895           7,133             7,715           7,720                     476             381                  412                  413

Total                    9,305,892       9,725,070      9,652,110      10,186,425               746,803           788,907            762,971              805,673

Direct Energy Consumption

                                         2003                     2004                        2005                             2006

Petroleum Nº6 (tonnes)                 11,295                    3,459                       6,015                            4,854

Oil Used (m3)                              17                          27                           0                                0

Diesel (m3)                            91,643                   89,694                      92,519                        102,469

Petrol (litres)                      2,366,085               2,631,847                    2,274,260                     1,586,736

Kerosene (litres)                            0                          0                    3,933                                   0

Natural Gas (m3)                     2,973,003               11,497,700                   6,514,577                      7,284,161

Liquid gas (tonnes)                       261                         225                      337                               938

Electricity (KW/h)             1,474,944,521            1,612,885,948                 1,686,706,144               1,639,305,753

                                                                                                         SUSTAINABLE DEVELOPMENT REPORT    ANGLO AMERICAN CHILE     37

In addition to the Energy Programme, Anglo American has adopted
initiatives like the interaction with other mining companies to learn about
their energy efficiency experiences, which has attracted the interest of
government authorities. Hence, Nicola Borregaard, the CEO of the Country
Energy Efficiency Programme, jointly with Anglo American Chile organised
the First Mining Roundtable with the participation of six mining companies,                  Energy Efficiency
ProCobre, and the Mining Ministry. The company has continued to promote
this initiative and was in charge of organising the 4th version of this
Mining Rountable.

Anglo American also supported the production of two leaflets on energy                       The company won the 2006 Energy
consumption, published by Chile Sustentable and the Country Energy                           Efficiency Award in the mining category.
Efficiency Programme. The company distributed 2,400 copies of the first                      The Ministry of Economy, the Confederation
leaflet internally and 600 for the communities around the five divisions.                    of Production and Commerce (CPC) and
                                                                                             the Country Energy Efficiency Programme
The Country Energy Efficiency Programme also designed a website
called Participative Work Area (ETP) where Anglo American and other                          recognized Anglo American Chile for its
mining companies have published information on the development and                           Energy Efficiency Programme.
characteristics of the programme, measurement methods and conversion

                                                                       September Anglo Base Metals establishes the programme
                                                                       October   Launch of the Energy Saving Programme with
                                                                                 a letter from the company CEO.

                                                                                          SHARING EXPERIENCES ENERGY EFFICIENCY PROGRAMME

2005                                                       2006
February  The 2003 consumption and emission baseline       March    Start of the monthly consumption and emission
          is established.                                           report by processes in all the divisions and
June      An Energy Manual is designed, containing the              reduction certificates start to be issued.
          basic definitions to carry out the programme.    June     The reporting system is consolidated: list of
July      The Energy Committee is created with                      certified reductions, monthly report by process
          representatives from the 5 divisions and roles            by division and long-term forecast.
          are defined.                                     October  Anglo American receives the Country Energy
August    A general 2003 – 2013 consumption and                     Efficiency Award in the mining category from
          emission table is established.                            the Ministry of Mining, the Confederation of
September The monthly consumption and emission report               Production and Commerce (CPC) and the
          starts to be disseminated.                                Country Energy Efficiency Programme.
November Re-launch of the Energy and Emission Savings      November Anglo American Chile and Honda Motor sign
          Programme with a letter from the company                  an agreement to promote the use of hybrid
          CEO.                                                      cars.
November Launch of the programme dissemination

                                                                               SUSTAINABLE DEVELOPMENT REPORT   ANGLO AMERICAN CHILE   39

Around 7 billions tonnes of CO2 are released into the
atmosphere each year. Some experts estimate that in the future
the increase in these kinds of emissions will be caused by
developing countries, mainly by the greater number of vehicles.
There are currently 15 cars per one thousand people in the
world, and according to ExxonMobil this figure will increase to 50
cars per one thousand people by 2020. Hence, the forecast is
an increase of around 40% in the demand for energy, while the
energy efficiency will only increase by 1% a year.

In the light of this, Anglo American Chile signed an agreement
                                                                              with Honda Motor
with Honda Motor de Chile to incorporate and encourage its
employees to purchase hybrid cars, which contaminate 80%
less than conventional cars and provide better performance than
vehicles that are exclusively petrol-driven.

The agreement, which complements the Energy Efficiency
Programme, involves Honda offering preferential commercial
conditions to company employees and Anglo American
developing a special programme to facilitate the financing of
cars. This initiative included the purchase of two vehicles to use
them as part of the regular pool of company cars. Three company
employees had already purchased hybrid cars for their personal
use as of December 2006.

     From left to right:
     Hitoshi Abe, president of Honda Motor; Danilo Núñez, Transport Undersecretary; Pieter Louw, CEO Anglo American
     Chile; Nicola Borregaard, CEO Country Energy Efficiency Programme, and Felipe Purcell, VP Marketing and Corporate
     Affairs Anglo American Chile. de Desarrollo de Los
      * Para mayor información sobre el Proyecto
     Bronces es posible solicitar folletería informativa.

Our People

“Adding value is about the attitude
and will of each one of us. Good
relations and communications
among everyone at Anglo American
Chile are essential in our company’s
long-term strategic vision.”

Alejandro Mena
VP Human Resources
Anglo American Chile


The objective of Anglo American Chile’s organisational          • Adolfo Ibáñez management diploma for all union leaders.
development is to give the business a competitive               • Supplier development programme at the Chagres Smelter.
advantage through its people. It has therefore focused          • Internal audit of all contractor companies to assess the
on “aligning the human capital management processes               Human Resources management.
at all organisational levels to attract, develop and retain
excellent performing people capable of creating value for       Anglo American Chile has a headcount of 5,623 people, of
the company.” This was the philosophy of the following          which 2,505 are own headcount, 749 are service contractors,
activities carried out in 2006:                                 1,518 are operations contractors and 851 are project
• Management Development Programme (MDP) for
  supervisors in Chile for the second year running.             Regarding the employee gender diversity, the female
• Young professionals hiring programme and activities to        headcount remained at 4%, the same as in 2005. In relation to
  retain talented people.                                       the average age of employees, this continued to be 43 years
• Start-up of the Development Centre.                           old, with the average company service time dropping from 15
• Second labour climate survey with the participation of all    years in 2005 to 13.5 years in 2006.
  the personnel.

                                                                                                                         ORGANISATIONAL DEVELOPMENT PEOPLE

Employment generated (as of December 31, 2006)
By division (including third parties)                2006            2005          2004
Los Bronces                                          1,355       1,270             1,288
Mantos Blancos                                         997         977             1,041
El Soldado                                           1,053       1,036               949
Mantoverde                                             678         768               666
Chagres Smelter                                        425         445               462
Santiago Offices                                       264         249               287
Project Contractors                                    851       1,008               763
Total Headcount                                      5,623       5,753             5,456

By dependence                                        2006            2005          2004
Own employees                                        2,505       2,387             2,253
Service contractor personnel                           749         707               760
Operations contractor personnel                      1,518       1,651             1,680
Project contractor personnel                           851       1,008               763
Total headcount                                      5,623       5,753             5,456

Breakdown of management positions                                        2006
Nº of vice-presidents or male senior managers                                 41
Nº of vice-presidents or female senior managers                                1
Nº of vice-presidents or senior managers                                      42
Nº of male managers                                                          100
Nº of female managers                                                          1
Nº of managers                                                               101

Own employee educational level                       2006            2005          2004
Basic Education                                        125             134           170
Secondary                                              541             432           462
Technical                                              967             966           749
University                                             872             855           872
Total own employees                                  2,505           2,387         2,253

Training area                                         2006                              2005                                        2004
                                             Man              Nº of             Man              Nº of                 Man                     Nº of
                                            Hours            people            Hours            people                Hours                   people
Safety, occupational health,                21,014           1,695             36,109             1,794               14,755                    1,780
environment and quality
Management                                  35,607           1,393             39,879            2,835                19,073                   1,272
Technical                                   82,392           1,302             50,730            1,024                59,861                   3,027
Others                                      13,317             457              1,207               78                   803                      56

                                                                                               SUSTAINABLE DEVELOPMENT REPORT   ANGLO AMERICAN CHILE    43

Anglo American is constantly looking for high-potential young professionals due
to its interest in having suitable people to participate in the succession plans. For
this reason, one of the main activities in 2006 as in the previous two years was
the Young Professional Recruitment Programme, in which 13 new graduates
participated to work in the first line of the organisation.

Moreover, the Senior Professional Hiring Programme was held for the first
time to boost the organisation’s line of succession. A special 2007 scholarship
programme was approved, which will fund the careers of 24 students at important
universities in the country.

Furthermore, a Development Centre was started up in 2006 to design individual
development plans for people with the help of a specialised external company.

Support continued for outstanding pupils in the communities surrounding the
company’s operations with the following programmes:

Professional Practice and Thesis Programme: these are special places for
workers’ children and students of universities in the cities near to operations to
undertake their professional practice and theses.

Apprentice Programme: this initiative started up 12 years ago at Mantos
Blancos and was implemented in all the divisions as of 2005. It entails providing
employment of a training nature for a 12-month period for youngsters of 18 to
21 years old, who have completed their secondary education at technical schools
in the communities near the divisions. The objective is to support them to develop
labour and personal skills. It is estimated that 40% of those school- leavers find a
job (10% remain in Anglo American Chile and 30% enter contractor companies).

     Direct Line

     The Direct Line, created in 2004 for company employees, contractors, and suppliers, to reduce the
     possibilities of practices infringing the Good Citizenship Principles, continued to operate in 2006.
     There was a decrease in the number of complaints due to the consolidation of the initiative.

                                                                                                          RECRUITMENT PEOPLE

Thesis Student Programme            2006      2005      2004
Nº of males                            56        50        40
Nº of females                          10         6         7
Total thesis students                  66        56        47
Amount involved (US$)             161,440   119,791   112,863

Apprentice Programme                2006      2005      2004
Nº of males                            84       115        60
Nº of females                          13         7        19
Total apprentices                      97       122        79
Amount involved (US$)             274,882   245,571   160,484

Professional Practice Programme     2006      2005      2004
Nº of males                           109        88        91
Nº of females                           4         3        39
Total practices                       113        91       130
Amount involved (US$)             158,119    72,223   101,446

                                                                SUSTAINABLE DEVELOPMENT REPORT   ANGLO AMERICAN CHILE    45


In 2006, Anglo American started a process of radical change
in the way of understanding communications, knowledge
management and collaboration. The organisation joined the
group’s global information network with the implementation of
thesource portal, adding 2,505 users that are connected to all
the company’s information worldwide.

The trial run stage ended in December 2006 and thesource has
been operating normally since January 2007. The portal adds
new applications for communication management, information,
and collaboration among employees beyond geographical and
cultural boundaries. It also provides access to daily news and
includes all the applications that previously had restrictions
limiting their potential.

     * Para mayor información sobre el Proyecto de Desarrollo de Los
     Bronces es posible solicitar folletería informativa.

                                                                                       LABOR RELATIONS PEOPLE

For Anglo American Chile labour relations are a key aspect in achieving its vision.
These are based on collaboration and on relations of long-term trust where the
management and employees work together to achieve common objectives of mutual
benefit within current regulations.

There are 10 unions with 34 leaders. Unionisation reached 99% in 2006, eight
percent higher than the 91% in 2005. This was mainly due to a new union being
formed at Mantoverde due to the insourcing of loading, transport and drilling operations
personnel carried out in 2005.

As in 2005, a workshop was held to inform the union leaders of the nature of the
copper business and its implications for the domestic and international economy. The
development of union leaders was also supported in 2006 by means of an Adolfo
Ibáñez University Union Leader Diploma. Its objective was to provide leaders with
management tools. The programme entailed leadership, accounting, labor legislation
and teamwork courses, among others.

The collective bargaining agreements are specific for each division and they set
forth the benefits, the working system, the union fund, coaching and training, among
other issues. There is a financial incentive for complying with the safety standards at
individual and operation level.

Life at Operations
Only Los Bronces and Mantoverde of Anglo American Chile’s five operations have
lodging facilities, due to their geographical location and shift system.

Even considering the existence of a shift system, the average working day of the
organisation is 43 hours a week and the national average is 45 hours. Furthermore,
all the employees in the divisions have a balanced diet in keeping with the work
requirements. The company also has employee recreation and entertainment facilities,
and it co-ordinates activities through the sports clubs.

                                                SUSTAINABLE DEVELOPMENT REPORT   ANGLO AMERICAN CHILE     47

Principles of Good Corporate Citizenship:
Employment and Labour Rights

•    We are committed to the adoption of fair labour practices at our workplaces and our conditions
     of service will comply with applicable laws and industry standards.

•    We will promote workplace equality and will seek to eliminate all forms of unfair discrimination.

•    We will not tolerate inhumane treatment of employees including any form of forced labour,
     physical punishment, or other abuse.

•    We prohibit the use of child labour.

•    We recognise the right of our employees to freedom of association.

•    We will operate fair and appropriate means for the determination of terms and conditions of
     employment. We will provide appropriate procedures for the protection of workplace rights and
     our employees’ interests.

• We will provide employees with opportunities to enhance their skills and capabilities, enabling
  them to develop fulfilling careers and to maximise their contribution to our business.

                                                                                                          WORK CLIMATE MANAGEMENT PEOPLE

Work Climate
Anglo Base Metals carried out the second organisational work climate
survey in June 2006 with the participation of all the employees at the
divisions and in Santiago and 92% of the Anglo Base Metals operations.        COMMITMENT
The local results were deemed satisfactory compared with those in 2004,
when this survey was undertaken for the first time. The average level of
satisfaction remained at 85%.

The survey examined 10 areas by means of 61 questions, i.e., efficient
leadership, clarity, standards, commitment, accountability, communication,
                                                                              To implement an action plan to reduce
team commitment, flexibility, diversity and reward.
                                                                              the work climate survey gaps.
As in 2004, focus groups were developed for a better comprehension
of the results. The objective was to start 2007 with the design and
implementation of action plans to strengthen those areas that need

                                                                             SUSTAINABLE DEVELOPMENT REPORT   ANGLO AMERICAN CHILE   49

                                                                                              Good Corporate
                                                                                              stresses that “all
                                                                                              employees and
                                                                                              contractors shall
                                                                                              perform their
                                                                                              duties according
                                                                                              to the highest
                                                                                              standards of ethics
                                                                                              and integrity.”

Relationship with
The company’s philosophy of working with contractors is that of maintaining a long-
term relationship based on professional, ethical and fair practices. All the organisation’s
activities focused on them are developed in keeping with this.

To such effect, the Chagres Smelter Division started to implement a Supplier
Development Programme with the support of the Promotion Board (CORFO) aimed at
providing them with management tools (see page 91). The programme lasts 3 years
and its objective is to support them to become companies of excellence and to provide
a better service, culminating with certification pursuant to the NCh 2909 standard. This
programme will be extended to the other divisions in the next few years.

IR Consulting carried out an external audit in 2006 on all contractors and focused on
compliance with labour legislation, their human resource management, and their safety
and infrastructure conditions. Based on the results of this audit, those with weaknesses
and non-conformities were informed and undertook the commitment to improve. The
compliance process will be monitored by the company in a subsequent phase.

Another initiative arising from the results of the audit was the training of the whole
organisation’s contract administrators to standardise criteria and tools with contractor
interaction. This training was carried out by the Catholic University of Chile.

An end-of-year celebration for contractors and their families was held for the first time
in all the divisions in 2006, with similar standards than those in place for employees of
Anglo American Chile.

Safety and

“All accidents and occupational
illnesses are preventable. All
necessary steps must be taken
to learn from incidents in order
to prevent any recurrence, and
common, simple, non-negotiable
standards must be consistently
applied.” These are the three
principles of the Anglo Safety Way
management system.


Determined to meet the demanding goal of “Zero Harm” at                               A safety system audit (Safety Peer Review) was carried out
its operations, Anglo American plc articulated a new safety                           in July 2006 to assess to what extent Chilean operations are
and occupational health strategy that is being applied in all its                     complying with the standards. A team was formed made up
operations worldwide as of early 2006. It is based on three                           of eight people from the five divisions and led by a specialist
principles:                                                                           of Anglo American plc, which undertook an audit and issued
                                                                                      a report. As this is one of the first experiences worldwide,
1) All accidents and occupational illnesses are preventable.                          the results were qualitative. This audit detected the need of
2) All necessary steps must be taken to learn from incidents                          strengthening leadership and the worker commitment and
   in order to prevent any recurrence.                                                boosting the monitoring and checking standard. Each Division
3) Common, simple, non-negotiable standards must be                                   received a set of photographs and reports with the findings to
   consistently applied.                                                              help them draw up the corresponding action plans.

A safety management system called the Anglo Safety Way                                Moreover, Anglo Base Metals launched a standard format in
arose from this decision, which is developed by means of a                            2006 to share information about accidents and their causes
consultation process that establishes twelve standards based                          called the Safety Incident Flash Report, which benchmarks
on the Plan-Do-Check-Act methodology and 142 requirements                             and extracts preventive conclusions from the operations of the
that are reviewed in each stipulated audit (see diagram on                            entire Group. It also helps to standardise the way of reporting
page 53). These standards, which were drawn up from existing                          when a lost-time accident or one of high potential (in which
procedures, the best practices in the industry, and renowned                          no personnel are injured but there could be a serious or fatal
international standards like OHSAS 18001 are the basis for                            injury) occurs. Furthermore, accident logs are maintained in
the development, enhancement and application of extensive                             all the divisions, which include information about the accident,
and integrated safety management systems.                                             its description, causes, lessons learned, and a diagram. This is
                                                                                      posted on the Intranet and experiences are shared. An accident
The Anglo Safety Way was supported with a global                                      statistical report is also submitted to the National Geology
dissemination campaign called “One Injury is One Too Many.”                           and Mining Survey (SERNAGEOMIN), pursuant to national
Posters, leaflets, banners, T-shirts and internally-used articles                     legislation.
were used to communicate this commitment.

                                                                          Anglo American’s

                           CULTURE                                            LEARNING                                    STANDARDS

                          Zero Target                                     Prevent Repeats                         Simple and non-negotiable
                                                                                                                     standards and rules
         All accidents and occupational                          All unsafe practices and incidents            We will adopt a set of simple and
         illnesses are preventable.                              will be investigated to identify the          non-negotiable standards and rules.
         We are all responsible for preventing                                                                 Line-management is accountable
         and correcting unsafe behaviour and                     We will take all the necessary action         for implementing and meeting the
         work conditions.                                        to prevent repeats.                           standards and rules.

                                                                                                                  SAFETY SAFETY AND OCCUPATIONAL HEALTH

Anglo Safety Way Standards                                              Continuous

   1.    Policy, Leadership and Commitment                 Policy

   2.    Risk and Change Management
   3.    Legal requirements and others                     Planning
   4.    Objectives, Targets & Performance Management

   5.    Awareness, Training and Qualification
   6.    Communication, Consultation & Participation       Implementation &
   7.    Data & Document Control                           Execution
   8.    Operating Control
   9.    Emergency Preparation and Response
   10.   Contractor & Collaborator Management

   11. Accident Investigation & Reporting                  Checking & Corrective Measures

   12. Monitoring, Audits & Reviews                        Management Review

The company has also established a decentralised organisation chart,
which gives independence to those in charge of safety and occupational
health. It has implemented indicators for the Visible Leadership
programme launched in 2004 and benchmarked all the divisions in
Chile on the main safety processes, visible leadership, behavioural
observations, investigation of incidents and near-miss reports. This is to
establish the quality and effectiveness with which they are implemented.
As a result, an individual report was made for each Division with the
areas for improvement and the company’s outstanding practices. The
divisions drew up action plans based on this report to address its
findings.                                                                                    When the next safety peer review is
                                                                                             undertaken in 2007, all the divisions
Management and supervision made 18,833 contacts during their site
                                                                                             must fully comply with the 12 Anglo
visits in 2006 (45% more than in 2005) to observe the safety behaviour
and motivate personnel to protect themselves and take care of the                            Safety Way standards.
company’s resources, according to the Visible Leadership Programme.

                                                                                            SUSTAINABLE DEVELOPMENT REPORT   ANGLO AMERICAN CHILE    53

                                                                 Anglo American Chile reduced its accident rate from 0.40 in 2005 to 0.34 in 2006.
                                                                 This indicator includes the own employee and contractor rates. The average accident
                                                                 rate of all the operations was 0.27 for employees and 0.38 for contractors. Although
                                                                 the contractor rate is still higher than the internal rate, it improved significantly,
                                                                 considering that historically this used to be three times higher than the internal rate.

                                                                 The figures position the company as one of the mining companies with the lowest
                                                                 accident rates in Chile, with the annual average incident rate of the industry
                                                                 around 2,000, which is equivalent to three incidents a day. Evidence of this is that
                                                                 in December Anglo American Chile completed 28 months without any fatalities.
                                                                 Moreover, the work absenteeism rate was 2.87% in 2006 compared with the 2.20%
                                                                 in 2005. More than 70% of the lost-time accidents are related to the “line of fire”
                                                                 (injuries from objects) concept and these situations mostly affect the hands.

                                                                 Furthermore, the incidents with the greatest potential of harm were related to heavy-
                                                                 duty equipment. One of the innovations the company will introduce in this area in
                                                                 2007 is the incorporation of information systems in mining trucks so drivers can
                                                                 detect and be warned about the presence of small vehicles around them. Training was
                                                                 also done to review the heavy-duty equipment and energy operation guidelines, as set
                                                                 forth in the Golden Rules on safety.

The drive to get Anglo
American’s safety
standards across to
its contractors has
reduced the accident
rate in just two years
from 0.85 in 2004 to
0.38 en 2006.

                                                                                                                                                SAFETY SAFETY AND OCCUPATIONAL HEALTH

Absenteeism rate (%)
2006                                2.87                                                                                   Accolades
2005                                2.20
2004                                2.23

                                                                                                                            • The Las Tórtolas concentrator of the Los
                                                                                                                              Bronces Division received the Gold Award
                                                                                                                              and the Crystal Floating Trophy for the
Own employee and contractor accident                                                                                          best safety performance in 2005 of Anglo
and severity rates                                                                                                            American’s subsidiaries worldwide in the
                                                                                                                              category of small operations (less than
2006                                                   LTIFR*                                           LTISR**
                                                                                                                              300 people).
                                    Own     Contractors               Total         Own     Contractors           Total
                                  Employees                                       Employees                                 • Los Bronces won the National Safety
                                                                                                                              Council Award for its safety performance
Los Bronces                           0.24             0.23            0.23           202                 181      191        in 2005 in the mining and quarry category.
Mantos Blancos                        0.44             0.22            0.29           374                  45      154
El Soldado                            0.00             0.68            0.41           0.00                434      263      • Mantoverde received an award from the
Mantoverde                            0.00             0.48            0.28             13                149       93
                                                                                                                              Mutual de Seguridad for attaining one
Chagres                               1.19             0.47            0.79           408                 364      384
Services & Projects                   1.19             0.47               0           408                 364        0
                                                                                                                              million man-hours without any lost-time
Consolidated Index                    0.27             0.38            0.34           170                 221      199        accidents.

                                                                                                                            • Mantoverde received an award from the
                                                                                                                              Regional Mining Safety Committee for the
                                                                                                                              best safety indexes in the Atacama Region.
2005                                                   LTIFR*                                           LTISR**
                                                                                                                            • The Chagres Smelter received a special
                                    Own     Contractors               Total         Own     Contractors           Total       mention in the John T. Ryan mining safety
                                  Employees                                       Employees                                   award.
Los Bronces                           0.09             0.56            0.35            35                 323      194
Mantos Blancos                        0.83             0.26            0.48           337                 215      261
El Soldado                            0.16             0.88            0.58           516                 158      306
Mantoverde                            0.40             0.33            0.35            67                 132      113
Chagres                               0.52             0.26            0.35           281                  57      132
Services & Projects                   0.00             0.00            0.00             0                   0        0
Consolidated Index                    0.29             0.48            0.40           213                 195      202

2004                                                   LTIFR*                                           LTISR**

                                    Own     Contractors               Total         Own     Contractors           Total
                                  Employees                                       Employees

Los Bronces                           0.37             0.66            0.56           115                 314      202
Mantos Blancos                           0             0.90            0.60             0                 489      344
El Soldado                            0.63             2.05            1.37           108                 538      336
Mantoverde                               0             0.43            0.35             0                 146      140
Chagres                               0.56             0.63            0.59           305                 173      252
Services & Projects                      0             0.60            0.52             0                 225      194
Consolidated Index                    0.33             0.85            0.65           100                 334      244

*Lost-Time Injury Frequency Rate (LTIFR): Number of lost-time accidents per 200,000 man-hours worked.
**Lost-Time Injury Severity Rate (LTISR): Number of working hours lost per 200,000 man-hours worked.

                                                                                                                          SUSTAINABLE DEVELOPMENT REPORT   ANGLO AMERICAN CHILE    55

                                                                       2007 Programme

                                                                       The 2007 safety programme is focused on near-misses, hazardous behaviour, and learning from
                                                                       other accidents with a proactive attitude. The following are some of the activities of this plan:

                                                                       1) Implement the Anglo Safety Way system, with an emphasis on the standards for which gaps
                                                                          were found in the analysis.
                                                                       2) Consolidate basic safety processes. Emphasise quality and effectiveness in applying safety
                                                                          tools according to the minimum corporate standards.
                                                                       3) Follow up and analyse preventive management by means of leadership indicators.
                                                                       4) All the operations must fully meet the equipment and heavy-duty machinery guidelines in
                                                                          2007, along with the power lockout practices and procedure.
                                                                       5) Enhance the audit process, using Anglo American’s standard reporting protocol and findings
                                                                       6) Undertake a new work climate survey, according to the Du Pont scheme, to assess progress
                                                                          from the previous one.
                                                                       7) Carry out the outstanding activities of the Contractor Plan, according to the minimum
                                                                          standards and criteria.
                                                                       8) Maintain the ISO and OHSAS certification.

                                                                 Parity Committees
                                                                 Each division has a Housekeeping, Hygiene, and Safety Parity Committee, pursuant to
                                                                 law Nº16.744, and there is also one at the Santiago offices. These organisations had a
                                                                 key role in 2006 due to the roll-out of the Contractor Plan.

                                                                 This initiative aims to standardise the relationship with third parties at all the
                                                                 operations and improve their safety indicators and work conditions. The Plan
                                                                 envisages 40 variables or requirements: general safety and productivity standards;
                                                                 regulatory aspects; and a long-term development plan.

                                                                 In 2006, the parity committees worked to establish the minimum contractor standards
                                                                 and requirements for operations and carried out initiatives to meet such requirements.
                                                                 The aim was to make an initial diagnosis to identify the gap and generate action plans
                                                                 to resolve this. The requirements and initiatives set forth in the Contractor Plan will
                                                                 start to be applied as of 2007. The long-term initiatives carried out with contractors
                                                                 will be available in the next report.

                                                                                                                 SAFETY SAFETY AND OCCUPATIONAL HEALTH

                                                                    Crisis Management Plan

                                                                  The Corporate Emergency Response Plan was approved and
                                                                  disseminated in August 2006, and this provides guidelines on
                                                                  forming and activating the Emergency Response Committee
                                                                  (ERC) and defines the roles and responsibilities of each one of
                                                                  its members.

                                                                  This committee is chaired by the company CEO and is made
                                                                  up of all the members of the Executive Committee plus the
                                                                  External Affairs Manager. It evaluates the information available
                                                                  and determines what emergency stage the situation is in. The
                                                                  objective is at all times to protect the integrity of employees
                                                                  and the community and safeguard the environment and the
                                                                  company’s interests.

                                                                  The Corporate Emergency Response Plan includes the
                                                                  responsibilities of each ERC member and the alternates of each
                                                                  one of the roles. It also sets out the way of initially recording
                                                                  emergencies and of informing this internally according to
                                                                  the degree of emergency. In addition to this plan, a Crisis
                                                                  Communication Plan was developed, which must be used as an
                                                                  appendix to this document.

* Para mayor información sobre el Proyecto de Desarrollo de Los
Bronces es posible solicitar folletería informativa.

                                                                                           SUSTAINABLE DEVELOPMENT REPORT   ANGLO AMERICAN CHILE    57

Occupational                                                      Risk Management
                                                                  The company has established that the major health risk

Health                                                            factors in mining operations are noise, vibrations, heavy metal
                                                                  emissions, combustion gases, heat, and work at altitude or
                                                                  in demanding ergonomics conditions. These are related to
Based on the Safety, Occupational Health and Environmental        the most frequent illnesses in the industry, like hearing loss,
policy (see page 27), the company shall “identify and             pneumoconiosis, silicosis and dermatitis.
evaluate the risks associated with its activities and
implement the necessary prevention and control measures           The zero tolerance policy on risks and occupational illnesses is
to protect the health and physical integrity of employees and     executed by means of a specific annual programme for each
contractors that work in its divisions.”                          division. This starts with pre-occupational medical examinations
                                                                  and periodical occupational examinations, and it is then
The specific goal for occupational health is to prevent or        structured based on the analyses of the potential hazards of
minimise work-related injuries or illnesses of employees          operations and the classification of personnel according to
and contractors. All the divisions have the OHSAS 18001           their exposure level to them. Based on the risk intensity, the
certification as of 2005, which is an international standard      periodicity of the medical check-ups is determined, which can
developed to assess the safety and occupational health            range from monthly to twice a year and are carried out internally
management systems. Moreover, all the operations and              or at the facilities of the Mutual de Seguridad, according to their
contractors have guidelines on good practices issued by           complexity.
Anglo American plc, which recommend minimal standards
and that in some countries exceed the standards of local          During 2006 the only case of an occupational illness in the
legislation.                                                      company occurred in October. An operator at Mantoverde
                                                                  was disabled for 7 days because of tendonitis of his upper
This area is managed by an integrated safety and                  extremities due to the repetitive movements of the remote
environmental system, and the Safety and Sustainable              control operation of an overhead bridge crane.
Development management is in charge of the management,
and the business units participate directly in the execution of   The purpose of these programmes is to reduce exposure to
the programmes, designating supervisors or risk prevention        a level at which the health risk is minimal. In some cases, this
personnel. Each operation also has Industrial Hygiene and         means acting on the source. Mantos Blancos, for example, has
Occupational Health (IHOH) teams made up of executives,           introduced enhancements to the electro-winning plant, which
advisors, and union leaders, who make a monthly review of         has enabled it to reduce the concentration of acid mist by 80%
the programmes and cases recorded. Each division issues a         and thereby significantly lower the likelihood of generating
quarterly report on this issue, which is consolidated at Anglo    respiratory illnesses.
Base Metals and finally Anglo American plc levels.
                                                                  The occupational health programme also includes a physical
The company also undertakes external audits with the              fitness check-up as part of the Physical Work Fitness
Mutual de Seguridad which review aspects ranging from the         Programme, which is especially designed for those people who
risk policy to the risk mitigation measures.                      are subject to considerable physical effort,.

                                                                                        OCCUPATIONAL HEALTH SAFETY AND OCCUPATIONAL HEALTH

Due to the greater risk of exposure to ultraviolet radiation from
the sun, the company has started basic measurements to take
the necessary action to prevent related illnesses. The Mantos
Blancos Division carried out a study in 2006, which quantified
the strength of the UV radiation to which some operators doing
outdoor work are exposed to establish their degree of exposure
based on what is laid down in Supreme Decree Nº594/01
(“Regulation on Basic Sanitary and Environmental Conditions in
Workplaces” of the Ministry of Health).
The measurement was made from 12:12 hours to 14:15 hours               Radiation
on a clear day using a radiometer. The conclusion was that the
maximum exposure time per day for the unprotected skin and
eyes of a normal person during the peak radiation time (12:00
hours to 14:00 hours) is 8.3 minutes. Any exposure time over
this limit should be with suitable protection, i.e., long-sleeved
white shirt with collar, hard hat with a visor, and sun cream with a
protection factor of over 30.

As a result, the operators at Mantos Blancos and Mantoverde
have suitable dress and sun block, and there is a special operator
rotation system at outdoor mine sites so no operator is exposed
to the sun for too long during peak hours.

                                                                              SUSTAINABLE DEVELOPMENT REPORT   ANGLO AMERICAN CHILE     59

“We are committed to the
rational use of resources and to
attaining significant control of the
environmental impact our activities
in order to achieve a sustainable

Lorenzo Menéndez
Senior Manager Safety & Sustainable Development
Anglo American Chile

                                     SUSTAINABLE DEVELOPMENT REPORT   ANGLO AMERICAN CHILE   61

The principles of Good Corporate Citizenship establish that “senior executives
and operation and production managers are responsible for the company’s safety
management and environmental performance and the allocation of suitable financial
and human resources.” To meet this responsibility, the general managers of each
division have the support of the safety and sustainable development managers, who
are co-ordinated at corporate level through the senior area manager.

For management to be efficient, all the information on raw materials, water, energy,
biodiversity, waste management, and environmental incidents is entered into a              KPMG Sustainability auditors reviewed the
safety, occupational health and environmental database called the SHE Database.            Los Bronces Division database during an audit
Likewise, in 2006 US$30.2 million were allocated to projects and activities for
                                                                                           this company makes to draw up the 2006
the environmental enhancement of the processes and initiatives concerning
the protection of autochthonous flora and fauna in the areas of operations. This           Sustainable Development Report of Anglo
investment amounted to US$10.4 million in 2005, in addition to the US$20 million to        American plc.
improve the environmental performance of the Chagres Smelter.

Maintenance was undertaken in 2006 for the ISO 14001 and OHSAS
18001 certification, and at the same time an upgrade was made to the
2004 environmental regulation.

Raw Materials
The sulphide and oxide ore mined is the main raw material for Anglo American’s
processes. Consumption in 2006 was 192 million tonnes, 3.8% more than the 185
million tonnes in 2005. The fine copper production increased by 0.7% and the raw
material consumption rate per tonne of product rose 3% compared with 2005.

The main raw material for the Chagres Smelter is copper concentrate, which is used
to produce metallic copper in the form of anodes and sulphuric acid as a by-product.
Based on this scheme, the company does not use waste from external sources as raw
materials, although some supplies are produced as a result of the recycling process
like lead anodes and tyres for mining equipment (see page 70).

The company classifies some of its supplies as strategic, according to the definition
                                                                                         Consumption of ore mined
made from an impact versus risk analysis for the productive process. The annual          (in millions of tonnes)
spend on each strategic supply is shown on a graph known as a Bubble Chart and
                                                                                         2006               2005                      2004
supplies are prioritised according to the variables indicated. Those mentioned in this
                                                                                          192                185                       174
report are high impact and high risk supplies.

                                                                                                 RAW MATERIALS ENVIRONMENTAL PERFORMANCE

Strategic Supply Item          2006 Consumption             Measurement Unit    Use/Application

Mine Operations
Diesel oil                            75,500                      m3            Fuel mainly used in haulage trucks and mining
Explosives                        Ammonium nitrate:
                                        23,000                   tonnes
                                Emulsion Dye: 20,000             tonnes
                            Electronic detonators: 42,000         units         Blasting to extract ore
Tyres                                    924                      units         45” rim tyres and greater used in loading,
                                                                                transport and support mine equipment.

Concentrator Plants
Grinding balls                        21,000                     tonnes         Steel balls of different diametres used for
                                                                                grinding in SAG and ball mills.
MIBC                                  792,814                      kg           Frothing agent: lines minute air bubbles to
                                                                                help the copper particles impregnated in
                                                                                xanthate adhere to them.
Xanthate                              210,500                      kg           Reagent used in the copper floatation process.
                                                                                It acts as a collector lining the particles of
                                                                                copper contained in the sulphide ore, making
                                                                                them impermeable, which causes them to rise
                                                                                to the surface.
Abrasion steel                       4,545,455                     kg           Steel that lines parts in constant friction with
                                                                                other media. It prolongs the life of machinery.
Sodium Sulfhydrate                   2,269,397                     kg           Reagent used in selective floatation. It
                                                                                facilitates the molybdenum floatation.
Lime                                41,583,826                     kg           Floatation and water treatment.

Diesel oil                             6,300                      m3            Fuel used in the smelting processes.

Hydrometallurgical Plants
Sulphuric Acid                        610,000                     MT            It is used in the copper leaching process to
                                                                                dissolve the copper contained in the oxide ores.
Thinners                               2,848                      m3            They thin the extractant preserving and
                                                                                enhancing its properties.
Extractants                           344,950                      kg           Selective reagent that separates the copper
                                                                                dissolved in the aqueous solution.

                                                                               SUSTAINABLE DEVELOPMENT REPORT   ANGLO AMERICAN CHILE   63

Water Management
Anglo American uses water, mainly in the ore slurry pipeline transport process,
leaching, flotation and refrigeration, with the Los Bronces Division needing the most
water. The total fresh water consumption in the divisions amounted to 34 million m3
in 2006, 2.96% more than the over 33 million m3 in 2005. Although consumption
increased due to the needs of operations, efficiency rose by 3.09%. 64% of the                          The National Mining Board (SONAMI) and
water used was re-circulated in 2006, 1% less than in 2005.                                             the Mining Council organised the “Mining
                                                                                                        and Water Resources” seminar in October
                                                                                                        2006. This allowed for standardisation of
Water Consumption (m3 )
                                                                                                        the criteria and visions of the different
Divisions                                                2006         2005         2004         2003    stakeholders interested in domestic water
Los Bronces                                        22,649,077    22,498,192   21,954,000   21,727,565
                                                                                                        consumption. Moreover, the SONAMI
El Soldado                                          3,185,921     3,362,959    3,575,811    3,334,480
Mantos Blancos                                      3,766,770     3,564,396    3,974,576    3,712,900   pledged to disseminate the conclusions of
Mantoverde                                           2,874,116    2,610,897    2,802,436    2,656,023   this seminar regionally as of January 2007
Chagres                                             1,503,657     1,125,540    1,474,833    1,288,600
Santiago                                                 8,810        8,312        7,259       12,153
                                                                                                        through regional forums.
Total                                              33,988,351    33,170,296   33,788,915   32,731,721

                                                                                                        WATER MANAGEMENT ENVIRONMENTAL PERFORMANCE

Supreme Decree Nº90 (DS90/00) on surface water discharges, qualified as an
industrial liquid waste emission source, came into force in 2000. Pursuant to this,
Anglo American informed the Superintendency of Sanitary Services (SISS) of 9
discharges, of which two have been eliminated and two are re-circulated back into the

In 2005, 80% of the total discharges came from the purge of the refrigeration water
at the Chagres Smelter without needing any prior treatment. In 2006, the smelter’s
discharges increased by 36% compared with the previous year, and this difference
can be explained by the 48-day smelter shutdown in 2005.

Water Discharges (millions of m3 )

                                                     2006          2005         2004
Total water discharged (millions of m3 )               1.5           1.1          1.5
Variance on previous year (%)                         +36           -26          -40

                                                               140.4 million m3 of well water is withdrawn from the
                                                               Copiapó riverbed a year. 75% of this is used for irrigation
CASE                                                           (106 million m3 a year), 13% for mining (17.7 million m3 a
                                                               year) - Mantoverde uses 2.4 million m3 a year - and 10%

STUDY                                                          is used by water utilities for human consumption (13.6
                                                               million m3 a year).

                                                               This is one of the most significant findings of the
                                                               “Diagnosis of the Copiapó riverbed water resources”
Diagnosis                                                      study that was commissioned to the consultant Golder
                                                               Associates S.A. by the Association of Agricultural
of the                                                         Producers and Exporters of the Copiapó valley,
                                                               Mantoverde, Minera Candelaria, the Vigilance Committee
                                                               of the river Copiapó and its affluents, and Sociedad Punta
Copiapó riverbed                                               del Cobre S.A. (Pucobre) with the co-ordination of the
                                                               Atacama Region Development Corporation (CORPROA).

water resources                                                Although this study is just a first step, Anglo American
                                                               deems it is progress with addressing the water resource
                                                               issue raised by all the riverbed users.

                                                                                           SUSTAINABLE DEVELOPMENT REPORT   ANGLO AMERICAN CHILE   65

Seepage into ground water and spills into surface water could                   programme by sectors according to the evapotranspiration
arise from the tailings dams of Los Bronces (including the                      capacity of the forest, and installation of flow meters at each of
Pérez Caldera 1 and 2 mountain dams and the Las Tórtolas                        the irrigation areas.
dam), Mantos Blancos and El Soldado. They could occur from
burst water, ore slurry, or tailings slurry pipelines, and seepages             The El Soldado Division is updating and making quantitative
from emergency ponds. For this reason, Anglo American has                       improvements of the information and quality of the estimated
implemented concrete measures to control and prevent this                       hydrogeological study submitted with the expansion of the
from occurring.                                                                 Torito dam to 181 million tonnes in 2003.

An increase in seepage from forest irrigation was detected                      One of the results obtained is that the impact of the dam
last year at the Las Tórtolas tailings dam of Los Bronces,                      on the ground water remains within the margins considered.
and this had to be analyzed in the areas involved along with                    However, to assure that the trend in future years maintains
the implementation of other action currently under study                        its level of impact this new study models the effectiveness of
to understand the problem better and assess the potential                       additional measures to control seepage from the dam. One
solutions. The most significant studies are: hydrogeological                    of the measures carried out was to seal the pond depositing
models of the basin; and study of the evapotranspiration                        slime on the perimeter of the dam pond thus leveraging its
capacity of the forest. The specific action taken to date                       impermeability to reduce the seepage of water in direct contact
is: construction of a pilot seepage ditch; detailed irrigation                  with the natural land.

     Mist Traps at Chañaral

     Mantoverde provided financial support in 2006 for the construction
     of facilities to start operating the mist trap system in the Falda Verde
     sector of Chañaral, whose objective is to irrigate vegetables and
     harvest purified water for human consumption. The project has led to
     ecological research of pupils from schools in the area and to theses of
     university students from different parts of the country. National and
     foreign researchers (German, Japanese, Spanish, North American,
     among others) have visited the project to learn about the water
     harvesting technique and the sustainable use of natural resources.

     * Para mayor información sobre el Proyecto de Desarrollo de Los
     Bronces es posible solicitar folletería informativa.

                                                                                                   SIGNIFICANT EMISSIONS ENVIRONMENTAL PERFORMANCE

Significant Emissions
Both extractive operations and smelting at the Chagres Smelter generate emissions.
Although the limits laid down in current legislation are met, Anglo American strives
to permanently reduce these emissions over time by means of specific initiatives and
systematic monitoring.

Extractive Operations
The divisions generate two types of significant emissions: CO2 as a result of the
use of fuels in the divisions and the consumption of electric power (see page 33);
and particulate material (PM10) from blasting, rock movement in quarries and the
permanent traffic of haulage trucks and other vehicles on unpaved roads. The
PM10 emissions are controlled by monitoring stations set up in areas indicated by
the authority, which measure the concentration according to systematic monitoring

                                                                                       SUSTAINABLE DEVELOPMENT REPORT   ANGLO AMERICAN CHILE    67

Chagres Smelter
The Chagres Smelter is one of the most modern smelters in Chile. As informed
in the 2005 Sustainable Development Report, its optimisation project entailed an
investment of US$60 million, of which environmental enhancements alone accounted
for US$20 million. This increased the sulphur and particulate material capture due to
the improvements of the gas handling system.

The main emission of the Smelter is sulphur dioxide (SO2). The legal provisions
regulating the concentrations in the environment are the primary quality standard
(DS113/02) and secondary quality standard (DS185/92) that mainly depend on
the level of SO2 emission. To monitor compliance, Anglo American has installed
a network with four official stations around the Smelter where the environmental
concentration of SO2 is recorded and whose results are reported each month. The
company has not exceed the regulation on SO2 emissions in the last three years.

Studies made indicate that the particulate material in Chagres is lower and the
division therefore has two monitoring stations located in the towns of Catemu and
Lo Campo. The graphs below show the SO2 performance for the stations with the
highest detection and the annual regulation (three years rolling average) of the PM10

Arsenic is another significant emission of the Smelter, which is regulated by Supreme
Decree 165 (DS165/98) with a limit of 95 tonnes per year. Chagres had emissions of
84.4 tonnes in 2006, equivalent to 88% of the regulated value..

Annual Environmental Concentration of SO 2 (ug/m3 N)

                                                                                                                      Standard Limit
                                                                     2006                 2005             2004   Primary         Secondary
Annual SO2                                                            58                  66.0             66.7     80               80

            SO2 AT MARGARITA SUB-STATION                                                                                              3-YEAR PM10 CONCENTRATION

                                       90                                                                                                          100


  C o n c e n t ra tio n ( u g/m 3 )

                                                                                                                            P M1 0 [μ g / m 3 N]



                                       20                                                                                                          40


                                        0                                                                                                          20
                                                  2002             2003          2004               2005   2006                                          1997   1998   1999   2000   2001   2002   2003   2004   2005   2006
                                                   SUBESTACIÓN MARGARITA            STANDARD                                                              CATEMU              LO CAMPO              REGULATION LIMIT

68                                          ANGLO AMERICAN CHILE   SUSTAINABLE DEVELOPMENT REPORT
                                                                                WASTE MANAGEMENT ENVIRONMENTAL PERFORMANCE

Waste Management
Anglo American has a waste management plan for its three operative tailings
dams (Los Bronces, Mantos Blancos and El Soldado) that complies with Supreme
Decree Nº86 (DS86/70) and that was updated in 2006. This Decree regulates
the design and safe operation of tailings dams and waste dumps. Furthermore, the
National Geology and Mining Survey (SERNAGEOMIN) monitors compliance
with this regulation.

The waste management plan for the dams includes continuous seepage monitoring
systems to sample the ground water quality in their respective basins.

Regarding other waste, Supreme Decree Nº148 started to be applied in 2005,
which sets forth the sanitary and minimal safety conditions for the generation,
possession, storage, transport, treatment, re-use, recycling, final disposal and other
means of disposing of hazardous waste. The company developed a management
system for this.

Quantity of hazardous substances identified

Divisions                                                                            Quantity identified
Mantos Blancos                                                                              184
Los Bronces                                                                                 210
Mantoverde                                                                                  189
El Soldado                                                                                  268
Chagres Smelter                                                                             253

(Not all the substances are managed with warehouse stock, some are only purchased when they need to be used)

                                                                  SUSTAINABLE DEVELOPMENT REPORT   ANGLO AMERICAN CHILE   69

Integrated Management                                            information on transport, among other variables.

                                                                 Moreover, each hazardous substance has a code to identify
System of Hazardous                                              it in the material administration ERP system to determine
                                                                 the quantity there is and its location in the company. This
Substances                                                       information is available on the Intranet, in the five divisional
                                                                 warehouses and each person who is going to handle a
All the information about hazardous substances and waste         hazardous substance also receives a Safety Data Sheet. There
used or that could possibly be used by own employees or          is also a Summary Sheet with brief information, which could
contractors was updated and consolidated into a new software     facilitate timely action in emergencies.
in 2006. This system improves access to the information on
the Material Safety Data Sheets, offering thorough data on       The software also provides information about the existing legal
products for all those people having access to a computer        regulation, including Law 19.300 on General Environmental
connected to the Anglo American network.                         Bases, the specific procedures, scope, definitions, the
                                                                 procedure for entering a new substance and the relationship
1,104 hazardous substances were classified. 696 of these are     with the sustainable development system.
used at corporate level and each one is related to a Safety
Data Sheet that has information on the product and supplier,     16 Safety Sheets on hazardous waste were also added,
the hazards and precautions, the legal registry, physical and    which are basically used oils and lubricants. These materials
chemical properties, first aid, handling and storage measures,   are stored separately and dispatched for final disposal by an
technical recommendations, their stability, toxicological        authorised hazardous waste disposal company. A truck comes
and ecological information concerning the degradation            to the divisions periodically to remove and transfer waste and
and bioaccumulation of the substance, final disposal and         dispose of it according to the legal permits and requirements.

     CASE                                                        Regarding lead slime, Recicladora Ambiental Ltda is paid
                                                                 to remove this and the price depends on the concentration

     STUDY                                                       of lead in the slime. This recycling company is an affiliate
                                                                 of Inppamet, which uses the remains of anodes for fresh
                                                                 production. The unit cost of anodes is expected to drop by
                                                                 20% as a result of the waste recovered from the electro-
     Recycling at Mantos                                         winning process being delivered to the same lead supplier.

                                                                 The second initiative aims to resolve the problem
     Blancos                                                     of scrapped mine haulage truck tyres, which are an
                                                                 environmental liability. An agreement was reached to sell
                                                                 the scrapped giant tyres to the company RAES and Santa
                                                                 Marta Ltda., which are currently on specially implemented
Mantos Blancos undertakes two interesting recycling              yards. It was also agreed to remove scrapped tyres directly
initiatives: the first is a system to re-use the lead waste      from the mine maintenance area workshops as they are
generated by the dissolution of the anodes used in this          scrapped.
process. As of 2004, solid lead waste (remains of anodes
equivalent to 30,000 kg a year) are delivered to the company     The outcome of this is a sales revenue of Ch$70,000 for
Inppamet, and as of January 2006 anode slime (which              each giant tyre and Ch$45,000 for mid-sized tyres, and the
accounts for 25,000 kg a year) is transported by the company     space freed up from the tyres can be used as a dump. This
Recicladora Ambiental Ltda.                                      also eliminates the cost of transporting and handling tyres,
                                                                 which is equivalent to an energy saving and a reduction in
In the case of solid lead, when Mantos Blancos buyes new         CO2 emissions commensurate with the Energy Efficiency
anodes it receives a rebate from the producer Inppamet.          Programme.

                                                                                           WASTE MANAGEMENT ENVIRONMENTAL PERFORMANCE

Waste Management (tonnes)
                         Hazardous Waste              Non-hazardous Waste
                              external               internal     external
Division             Recycling        Final          Recycling      Final
                                    disposal                      disposal
Los Bronces             1,129          230      0      1,819        1,811
Mantos Blancos            197           31      0        138           28
El Soldado                119          145      0      1,331         484
Mantoverde               220           195      0         34         380
Chagres Smelter       29,044             0      0      2,105          131
Anglo American Chile  30,709           601      0      5,427       2,834

                         Hazardous Waste              Non-hazardous Waste
                              external               internal     external
Division             Recycling        Final          Recycling      Final
                                    disposal                      disposal
Los Bronces              437            18      0      1,508       1,336
Mantos Blancos           278            89     55        855          62
El Soldado               117           311     28        258         541
Mantoverde               245           186     16        105         306
Chagres                     0            0      0        491         208
Anglo American Chile   1,076           604     99      3,217       2,453

                         Hazardous Waste              Non-hazardous Waste
                              external               internal     external
Division             Recycling        Final          Recycling      Final
                                    disposal                      disposal
Los Bronces              496             0       0     1,520         448
Mantos Blancos           382           267      92       643          319
El Soldado               229             0      18     2,109          710
Mantoverde                312          166      12        35          274
Chagres                     0            0       0     1,300            0
Anglo American Chile    1,419          433     122     5,608        1,751

                                                                             SUSTAINABLE DEVELOPMENT REPORT   ANGLO AMERICAN CHILE   71

Anglo American is committed to the efficient use of its natural resources and to
protecting and rehabilitating those ecosystems affected by its disturbance, and to
drawing up biodiversity action plans. This led it to establishing the quantity of lands
occupied and to carrying out a study in 2003 on the implementation of projects
concerning protection of the biodiversity in its divisions. According to the Safety,
Occupational Health and Environmental database, Anglo American occupies a total of
84,797 hectares, and operations account for disturbance of 9,140 hectares of the total.

El Soldado is the only operation that has rehabilitated part of its land, specifically
because some of its dumps are in the closure stage. The other divisions have not
considered land rehabilitation yet, as all the dumps are currently being used. The
rehabilitation plans are also envisaged in the closure plans.

Division                                 Total land             Land disturbed   Rehabilitated land
                                         (hectares)               (hectares)        (hectares)
Los Bronces                                35,407                   4,710                    -
Mantos Blancos                              6,800                   1,888                    -
El Soldado                                  8,155                     945                    7
Mantoverde                                 34,395                   1,557                    -
Fundición Chagres                               40                     40                  N/A
Total                                      84,797                   9,140                    7

                                                                                                                 BIODIVERSITY ENVIRONMENTAL PERFORMANCE

Management of Biodiversity
A study was made in 2003 to implement projects to protect the biodiversity in all the
divisions. Los Bronces and El Soldado are the operations with the greatest risk, as
they are located in areas deemed by the authorities to be priority sites for biodiversity

Biodiversity Strategy Principles

• Allocate resources and responsibilities for the management of biodiversity.
• Incorporate biodiversity elements to the business planning.
• Implement awareness, educational and training programmes on this issue.
• Draw up action plans that include inventories of biodiversity, resources and systems,
  risk assessment, and the impact of biodiversity activities, monitoring programmes
  and corrective action.
• Incorporate biodiversity criteria related to closure, abandonment and rehabilitation.

                                                                                             The Los Bronces Division, the
Los Bronces                                                                                  Borough Council of Lo Barnechea
                                                                                             and Corporación La Montaña
The Los Bronces division has developed the Yerba Loca Nature Sanctuary                       signed two agreements: the first
Conservation project and Villa Paulina with the Borough Council of Lo Barnechea              one binds them to develop a
and the National Forestry Corporation (CONAF). The aim is to raise knowledge of the
                                                                                             waste disposal programme for the
sector and support the biodiversity conservation of both sanctuaries.
                                                                                             next ski season, and the second
To such effect, it drew up a Biodiversity Management Plan for Villa Paulina. In 2006, it     one to schedule an outing for 600
carried out satellite follow-up of three Andean condors born in captivity and released       pupils in eighth grade of basic
in 2005. It created a Clean Ecology Guides Training Programme with the Borough               educational schools in the district
Council of Lo Barnechea, which will be implemented as of 2007. The objective is
to train monitors that can show the benefits of these areas and teach visitors to             to clean up the mountain.
protect and look after the environment. 60 guides were trained, who received an
internationally-valid certificate.

                                                                                            SUSTAINABLE DEVELOPMENT REPORT   ANGLO AMERICAN CHILE    73

El Soldado Division
Native forest accounts for 350 hectares of the 8,155 hectares owned by El Soldado,
and mining activities account for 945 hectares. The mine is in a Mediterranean
ecosystem that is only present in five places in the world. A survey was carried out in
2003, and the outcome was that this area possesses one of the highest concentrations
of the following species: Belloto del Norte (Beilschmiedia miersii) (natural monument);
Naranjillo (rare) (Citronella mucronata); Guayacán (Porlieria chilensis) (vulnerable); and
Puya berteroniana (vulnerable). There are also Lingue del Norte (Persea lingue), Temo
(Blepharocalyx cruckshanksii) and Puya chilensis (all vulnerable). Regarding the fauna,
there are species in the conservation category like the Culpeo, Chilla and Cururo foxes,
the Lemniscata lizard, the condor and the ringdove.

El Soldado has an action plan for the management of biodiversity and permanently
supports various research and studies on protecting the flora and fauna of the land
around its facilities:

• Propagation project for species that are difficult to reproduce like the Naranjillo and
  Guayacán with the Christa Mock agricultural high school of Nogales (see page 75).

• Agreement with the Foundation for the Recovery and Promotion of the Chilean Palm
  Tree for the “Belloto del Norte for Future Generations” project, which consists of the
  research, conservation, protection and promotion of the environmental heritage of the
  Belloto del Norte and which has propagated more than 50,000 new plants.

• Promotion of the sustainable use plan for the El Soldado territory with the Natural
  Resources Studies Centre of Universidad Mayor (OTERRA), whose aim is to
  acknowledge the environmental attributes to make them compatible with the
  presence of a large productive activity. The objective is to define action to articulate
  the specific programmes and the incorporation of sustainability criteria to the El
  Soldado mining operations. The process will end in 2007 with the development of
  land management programmes that will be steadily implemented.

• Vegetative reproduction research on the Belloto del Norte with the Playa Ancha

• Scientific research on the Belloto with the Catholic University, which entails
  designing a transfer protocol, vegetative propagation and micro-propagation with
  genetic material of the transplanted species and the research into the self-ecology
  of the species.

                                                                                                             CLOUSURE PLANS ENVIRONMENTAL PERFORMANCE

                                                                       of Mediterranean native forest with a high diversity and

 CASE                                                                  endemicity of flora and fauna species.

                                                                       Anglo American has maintained a co-operation agreement

 STUDY                                                                 since 2002 with the Christa Mock agricultural high school
                                                                       of Nogales to investigate methods of propagating native
                                                                       forest species, especially those that are threatened or are
                                                                       vulnerable to extinction. To date, this school has propagated
 Biodiversity                                                          more than 20,000 native plants and it is expected to produce
                                                                       60,000 more in the next three years. All these plants have
                                                                       been added to the reforestation and forestry enhancement
 at El Soldado                                                         programmes on and off the land owned by Anglo American
                                                                       in the area.

                                                                       Furthermore, a community plant propagation programme
The El Soldado land is located in the mountain range called the        was started due to the knowledge gained. Agreements were
“El Melón Cordillera,” classified by the National Environmental        signed with small landowners in the communities around El
Commission (CONAMA) as priority 1 for the conservation of              Soldado, with the first goal being the propagation of 20,000
the biodiversity of the land ecosystems of the Fifth Region. Its       plants by 2007. All these will be purchased by the division to
importance was revealed due to the presence of large quantities        use them in its reforestation programme.

                                             Closure Plans
                                             Based on the half-yearly planning, it was necessary to update the closure plans of
                                             all the divisions in 2006, since operations are flexible and their resources therefore
                                             change over time.

                                             The closure plans consider the variables proposed by the authority in DS 132/04
                                             and also include Anglo American’s corporate requirements, which aim to guarantee
                                             that what is left after closure does not involve any environmental or social harm
                                             whatsoever. The possible impacts of the operation are also identified, solutions are
                                             defined and their value is quantified to make a financial provision for the closure cost.
                                             The provisions currently existing for the closure of Anglo American Chile’s mine sites
                                             amount to US$145.5 million.

                                              SCHEDULED CLOSURE YEAR BY DIVISION

                                              Division                                                                        Last year
                                                                                                                             of operation
                                              Mantos Blancos                                                                      2012
                                              Los Bronces                                                                         2041
                                              El Soldado                                                                          2024
                                              Mantoverde                                                                          2013

                                                                                            SUSTAINABLE DEVELOPMENT REPORT   ANGLO AMERICAN CHILE   75

Land Management
To identify those having rights on a particular landholding, especially surface
landowners, the public registries of the respective real estate, mine, easement and
lien registrars are used, among others. Site visits are also made to identify occupants
having any other land title or possession.

The company constitutes surface and mining ownership of the lands it is interested in
exploiting. The surface property title is indefinite, provided that it does not default on
payment of the respective mining licence. It also constitutes mine easements on third-
party lands to provide access to mining operations by means of roads, to aqueducts, to
electric power lines, etc.

                                                        ENVIRONMENTAL INCIDENTS ENVIRONMENTAL PERFORMANCE

The company classifies environmental incidents according to their impact and effect
on the environment, considering the physical and biological environment, protected
species, level of community disturbance, third-party health and property, cultural values
and compliance with regulations.

Incidents are classified into the following 3 categories based on these variables:
Level 1: Minor impact, short-term effects.
Level 2: Moderate impact, medium-term effects.
Level 3: Major impact, long-term effects.

According to the Safety, Occupational Health and Environmental database, there were
41 environmental incidents in 2006 compared with 47 in 2005. Most of the situations
informed were level 1.

Number of Environmental Incidents

         Los Bronces Mantos Blancos         El Soldado         Mantoverde Chagres Total
2006           1                15                5                     9                  11           41
2005           6                2                14                    16                  9            47
2004           6                10                6                     5                  1            28

                                                SUSTAINABLE DEVELOPMENT REPORT   ANGLO AMERICAN CHILE    77

                                                                Spills of substances (m3)

                                                                2006                     Los Bronces       Mantos Blancos     El Soldado      Mantoverde
                                                                                          NºVolume           NºVolume         NºVolume         NºVolume

                                                                Process water          -               -    2       7       -         -       -        -
                                                                Acid/Solutions         -               -    2       5       1        40       1      0.1
                                                                Oil/Fuel               -               -    -       -       -         -       -     0.13
                                                                Slurry/Tailings        1               -    -       -       -         -       -        -

                                                                2005                     Los Bronces       Mantos Blancos     El Soldado      Mantoverde
                                                                                          NºVolume           NºVolume         NºVolume         NºVolume

                                                                Process water          2       1,461        -       -       2     3,240       -        -
                                                                Acid/Solutions         1          50        3       6       -          -     12     0.36
                                                                Oil/Fuel               -           -        -       -       7        0.5      4     0.13
                                                                Slurry/Tailings        1          16        -       -       -          -      -        -

                                                                2004                     Los Bronces       Mantos Blancos     El Soldado      Mantoverde
                                                                                          NºVolume           NºVolume         NºVolume         NºVolume

                                                                Process water           -              -    -       -       -          -      -          -
                                                                Acid/Solutions          -              -    9    334        1        4.5      -          -
                                                                Oil/Fuel                -              -    1    0.08       1        0.4      -          -
                                                                Slurry/Tailings         -              -    -       -       1          2      -          -

                                                                There were three situations of special importance in 2006, more due to their social
                                                                impact rather than environmental implications. Two of them were related to vehicle
      Copper is a malleable and ductile                         accidents on the public road to Los Bronces. The first one occurred in March and
      metallic element, a very good conductor                   involved a fuel transport truck, and the second one was in August and involved a
      of electricity and heat, and it is very                   vehicle that was transporting ammonium nitrate. In both cases, a small percentage of
                                                                the spill seeped into the river San Francisco compelling the drinking water plant to
      resistant to atmospheric corrosion.
                                                                suspend impoundment for a few hours.
      It is present in virtually everything
      around us. It is a good electrical and                    As a precautionary measure, the safety norms were reviewed with all the suppliers
      thermal conductor (60% of the global                      and contractors and new speed control systems were implemented, including the
      production is focused on this function),                  re-opening of a control point at Las Puertas, which will calculate the speed of trucks
                                                                between this point and the entrance to the Division and operations.
      and also has various benefits for human
      health, agriculture, communications and                   The third incident took place in December and entailed the ore slurry pipeline from Los
      medicine.                                                 Bronces to Colina bursting, which caused the material (basically ground rock) to seep
                                                                downhill. The emergency pond of the pipeline received part of this material and the rest
      Furthermore, copper alone contributes to                  flowed into the El Durazno creek where it joins the river Colina, located downstream of
                                                                station Nº2. This led to the river turning a lead colour due to the effect of the sands in
      conserving natural resources, minimising                  suspension.
      waste and reducing the energy use. This is
      because it is estimated that around 80%                   The irrigation channel gates were closed timely to control the situation, dikes were
      of all the copper ever extracted is still in              built in the El Durazno creek to separate* solids and start a process to clarify the
                                                                water in the river Colina. The irrigation association committee was contacted to assess
      use. Moreover, up to 40% of the annual
                                                                the situation in the next 12 and 24 hours to allow it to continue irrigation. Everything
      global demand for copper comes from                       done enabled the flow to return to normal 24 hours after the incident. A thorough and
      recycling.                                                detailed clean-up operation was carried out in the entire area in the next three months.


“The application of the SEAT
methodology in Anglo American
Chile’s five productive divisions
generated important information to
improve the company’s social and
environmental performance, to
serve as a useful resource to draw
up its engagement plans, and to
adopt social intervention strategies
with clear objectives involving the

Ximena Abogabir,
Casa de la Paz Foundation


The company vision assumes as an ethical obligation that its productive operations
generate fruits in terms of social reciprocity, which means that each one of its
operations not only provides returns to the company but also better economic and
social conditions for the area where it is located. The main endeavours are focused
on maximising work opportunities for the local workforce with the support of suitable
training programmes, the promotion of training for its employees, the development of
ongoing alliances with various significant areas of the community, and the fostering of
small and mid-sized local businesses.

To carry out these commitments, the general managers of the divisions have the
technical and operative support of the safety and sustainable development managers,
who are organised corporately through the senior area manager. Moreover, as of
2006 the co-ordination of projects and social policies is supported by a management
specially engaged in these issues and that as of 2007 will also be responsible for the
Anglo American Foundation, whose legal proceedings are being processed. Its mission
will be to develop corporate programmes to support small and mid-sized businesses
(see page 86).

Complementing this structure, a Sustainable Development Committee has been
operating since 2003, headed by the company CEO and made up of all the vice-
presidents, and the senior safety and sustainable development manager. Its objectives
are to embed the social responsibility concepts in the company’s strategic definitions,
to identify key aspects and assess and develop a structure for the integration of
social values within the organisation, and to establish concrete long term goals in the
different development areas.

                                                                                                                                                                    SEAT SOCIAL PERFORMANCE

SEAT                                                                                                                            COMMITMENT
The Good Corporate Citizenship document sets out that the company shall try and
identify those aspects that might affect communities. The implementation of the
socio-economic assessment toolbox (SEAT) is part of this statement, which was
applied by all the divisions in the country in 2004. This not only formalised a series of
processes and practices undertaken by the company to date but also helped to have a
planning tool to manage the social, environmental and economic impacts of operations.                                            To articulate management and
The process, supported by the Casa de la Paz Foundation16 , ended up with a report for                                           standardisation policies for the social
each division that included the following:
                                                                                                                                 development indicators in 2007.
•   The profile of mining and its related communities.
•   The identification and assessment of the socio-economic impacts of each division.
•   The economic and social impacts raised by the stakeholders.
•   The assessment of key issues and their impacts.
•   General management measures.
•   Performance indicators.
•   The added value that each division provides to its community.
•   The quantity of material goods and services acquired locally.
•   The local community percentage of the workforce.
•   The investment in public infrastructure and social contributions.
•   Indemnity and tax payments.

The application of the SEAT also considered the development of management
responses to the key issues raised in community engagement, which were
implemented in 2006 and extend to 2007. Social performance indicators were
developed to follow up on these activities. It was necessary to homogenise them for
their application, and they will therefore be worked on in 2007.

 Casa de la Paz (; a Civil Society Organisation (NGO) engaged by means of support initiatives in promoting
citizen participation, environmental education and relations between companies and communities, among others.

                                                                                                                                SUSTAINABLE DEVELOPMENT REPORT   ANGLO AMERICAN CHILE    81

                                                                Moreover, in 2006 Anglo American plc submitted the second version of the SEAT
                                                                with four new tools, since the previous process helped to establish certain basic
                                                                community needs. These concern supporting the local public health systems, looking
                                                                for initiatives providing synergy between the community and the investments in
                                                                infrastructure made by the company, people relocation planning by considering
                                                                economic, environmental and social variables for their transfer, and the development
                                                                of local skills to reinforce them, making them more effective and efficient to meet the
                                                                needs of their own districts.

                                                                In the light of this, each division has a budget to implement the activities contained
                                                                in the Community Engagement Plans (CEP). The total social development budget
                                                                presented, which amounted to US$1.2 million in 2006, includes payment to
                                                                associations, donations in money, support of social initiatives and the apprentice,
                                                                thesis and professional practice programmes (see page 45). It also considers the
                                                                workshops promoted by the company, trade courses and study scholarships. The
                                                                budget for community activities amounted to around US$1.3 million in 2005, and
                                                                US$734,000 in 2004.

                                                                Furthermore, US$3 million were provisioned in 2005 for the operation of the Anglo
                                                                American Foundation. US$500,000 of this was allocated in 2006 as a first stage to
                                                                the Emerge Programme and the agreement with Fondo Esperanza (see page 86), of
                                                                which US$290,000 were actually invested.

Los Bronces Division
Los Bronces has three types of initiatives. Those for the                              projects were financed in various neighbours committees
development of kids and youngsters like the inauguration                               of Lo Barnechea, it supported the 3rd Drug and Alcoholism
of a bus library in Colina, the computer equipment of the                              Prevention Family Walk, and supported the “Seba y Cabeza
Corporación Privada de Colina, the purchase of new wind                                de Pelota” project, whose aim is to educate kids in first and
instruments for the Youth Orchestra of Colina, the financial                           second grade of basic education on prevention and awareness
support of the Youth Orchestra of the Lo Barnechea                                     of the dangers and consequences of addiction by means of
Corporation, and the expansion of the reading centre of the                            academic methodology.
same district. A swimming pool was also built at the Rigoberto
Fontt high school of Colina, and an agreement was signed                               The division also supports initiatives concerning the
with the company Sodexho and the Municipal Educational                                 development of public health. To meet this objective, it started
Corporation of Colina to start the specialised catering course in                      the refurbishment of the current emergency healthcare clinic
that same school.                                                                      (SAPU) in the district in alliance with the Borough Council
                                                                                       of Colina so as to provide a quality emergency service to the
The second type of initiative is focused on drug and alcohol                           people, and as every year it provided catering services to the
addiction prevention programmes. Seven early prevention                                Chilean Police at the company’s facilities in the La Ermita sector.

                                                                                                                                               SOCIAL PERFORMANCE

  First Meeting of Community Development Teams at the Chagres Smelter

Chagres Smelter Division
Various initiatives arose from the application of the SEAT to        The Community Development Teams of each town are in
partly address the community concerns about the operations.          charge of designing the projects and managing their execution
The projects implemented included the Goat and Beekeeping            and assessment, always with the support of Anglo American.
Agricultural Farm, which received the Good Corporate                 The projects to be developed must make a contribution to
Citizenship Award from the Chilean-North American Chamber            the community and include community participation through
of Commerce (AMCHAM), training in agricultural trades at the         voluntary work, materials or financial resources, without
Chagres high school and the Open Door Programme17 .                  fostering a relationship of assistance.

However, the application of these initiatives allowed the            As a result of this approach, the relationship evolved from
company to realise they must be complemented to attain               an individualistic stance to one of a common vision, the
deeper ties with the community. For this reason, in late 2005        community’s knowledge of Anglo American’s contribution
and early 2006 participative work was carried out to identify        to these initiatives increased, and it improved the way the
those initiatives that were of interest to the communities           community can raise its concerns about operations.
surrounding the Smelter, which would make a contribution to
improving the quality of life of the people while aligned with the   Moreover, a Master Community Engagement Plan symposium
corporate policies.                                                  was held in December for all the members of the community
                                                                     development teams. During that occasion, each team shared
A strategy was adopted to develop local leaders by means of          their projects making this an excellent knowledge sharing
the joint design and management of the projects arising from         opportunity.
these initiatives and as part of the 5-year Master Community
Engagement Plan. To apply this strategy, groups of neighbours
were created, made up of local organisation leaders called
“Community Development Teams.”

                                                                     17 See the 2005 Sustainable Development Report.

                                                                                                     SUSTAINABLE DEVELOPMENT REPORT   ANGLO AMERICAN CHILE     83

Mantos Blancos Division
Mantos Blancos signed an agreement with the National Mining Board (ENAMI) in
2006, in which the division pledged to receive the production of small-sized copper
producers who had no one to sell it to due to the limited quotas of the old processing
fee system, according to the data of the Mining Trade Association of Antofagasta

Furthermore, as in the last three years, the main focus was on the financing of the
DeLTA – UCN Programme (developing and leading academic talent), which is been
implemented jointly with the Catholic University of the North, the Andes Foundation
and the borough councils of Antofagasta and Mejillones.

This is an extra-curricular academic programme for low income families, that is
developed as a complement to school education aimed at pupils with academic talent
from the sixth grade of basic education to the last year of secondary education. It aims
to develop and empower their intellectual and socio-affective skills, by contributing to
educating creative and critical people who are highly motivated for knowledge, and in
turn ethically responsible, socially committed and affectionately integrated.
Students joining the DeLTA-UCN Programme per year

Year        6th Grade      7th Grade      8th Grade       1st Grade   2nd Grade   3rd Grade   4th Grade   Total
              Basic          Basic          Basic         Secondary   Secondary   Secondary   Secondary
            Education      Education      Education       Education   Education   Education   Education

2004            40                                              40                                        80
2005            40             40                               40       40                               160
2006            40             40             40                40       40          40                   240
2007            60             40             40                40       40          40          40       300

                                                                                                                                               SOCIAL PERFORMANCE

El Soldado Division
The main initiative in 2006 was the repair of the Los Caleos        sponsored, like presentations of artistic and musical groups,
dam, whose water is used by the Association of Landowners.          and the activities of the Fire Brigade’s Underground Rescue
This work, which cost Ch$10 million, involved changing the          School and the Urban Rescue Centre were supported, among
geomembrane to impermeabilise the dam and increase its              others.
original capacity by 8%. Due to this, landowners can make
better use of the water for the technical irrigation of their       An agreement was reached with the National Training Institute
crops.                                                              (INACAP) to launch the complementary training programme
                                                                    “Gastronomy Assistant and Food Preparation” in the district
El Soldado also continued to support the transport of 120           of Chañaral. This programme trains over 40 youngsters of 3rd
pupils from their homes in Collahue, Los Caleos and the Macal       and 4th grade of secondary education at the Federico Varela
III housing estate to their classes at the Felipe Cortés high       high school to provide them with new knowledge and tools so
school, the Santa Isabel school and the Municipal School of El      they can gain a specific trade and increase their possibilities of
Melón, contributing to higher school attendance and improving       employment when they leave school. This initiative, which was
the transport safety. Before this project, the children used to     launched in 2004 in the Mantoverde Division, has trained over
walk 10 kilometres a day to attend classes.                         120 youngsters in this speciality.

The division also supported the Municipal Health Service            Mantoverde also plays an important role in the Atacama
with the purchase of an ecotomograph and the monitoring             Region Development Corporation (CORPROA), which is made
of the neighbours’ wells, and also supported other El Melón         up of businessmen and company representatives. Its objective
and Nogales district initiatives such as the Fire Brigade, the      is to promote the mining cluster to consolidate the process
neighbours’ committees and elder people’s homes.                    in Atacama, boosting local small and mid-sized companies.
                                                                    All these activities are focused on supporting the two large
                                                                    identified needs of education and employability of the people
Mantoverde Division                                                 in the area, and on local charity institutions and community
Mantoverde provided financial support to the Regional Mining
Safety Council (CORESEMIN18) of Atacama in 2006 to
support health and risk prevention programmes of small miners
in the north.

The social budget is also focused on educational and cultural
activities, support for the Chañaral and El Salado Fire Brigades,
productive organisations and local authorities. A series of talks
were given during the year to secondary education, technical
and university pupils and students. Cultural activities were        18

                                                                                                     ANGLO AMERICAN CHILE   SUSTAINABLE DEVELOPMENT REPORT     85

                                                                  Signing of an Agreement
                                                                  with Fondo Esperanza

                                                                According to the Ministry of Planning (MIDEPLAN), 20% of the
                                                                poorest families in Chile live on an average monthly income of
                                                                less than US$215, whereas 20% of the wealthiest families live
                                                                on US$3,000. This reality was noted during the application of the
                                                                SEAT and when the local community requirements were received.

                                                                This is why, as mentioned in the last report, the company
                                                                approved a budget of US$3 million in late 2005 to create a
                                                                rotating fund that will help social undertakings and development.
                                                                By means of its Emerge Programme, the Fondo Esperanza
                                                                Foundation (an Hogar de Cristo organisation), Anglo American
                                                                Chile strives to contribute to the economic development and well-
                                                                being of the communities around its operations by supporting
                                                                small business. The credit methodology of the Fondo Esperanza
                                                                Foundation is based on the formation of community banks made
                                                                up of groups of 18 to 25 people who live in the same district and
                                                                who undertake their business independently and pledge jointly
                                                                and severally to pay back the capital lent.

                                                                The first stage of the project will benefit over 1,800
                                                                entrepreneurs from the provinces of Quillota, San Felipe and
                                                                Chacabuco over the next two years with an investment of around
                                                                US$500,000. Based on the results, the proposal allows for
                                                                expansion that would reach over 6,700 entrepreneurs in three
                                                                years with a total investment of US$2.5 million.

                                                                A methodology of direct support has been developed for those
                                                                entrepreneurs who have moved beyond subsistence, which will
                                                                start to be applied as of May 2007 with the first undertakings
                                                                selected from the survey. Over 20 projects with the potential of
                                                                entering this programme are currently under analysis.



 “Excellence in safety performance,
 best practice in sustainable
 development and sound business
 performance go hand in hand”

 Tony Trahar
 Anglo American plc.

 Anglo American es propietaria del 44% de la Compañía
Minera Doña Inés de Collahuasi.

                                                        ANGLO AMERICAN CHILE SUSTAINABLEANGLO AMERICAN CHILE
                                                         SUSTAINABLE DEVELOPMENT REPORT DEVELOPMENT REPORT     87

Highlights of 2006
2006 will be remembered for the high copper price in international markets with the
average price reaching 305.3 US$c/lb, an 83% increase on the average price of 167.1
US$c/lb of the previous year. This really boosted Anglo American Chile’s earnings of
US$4,403.2 million, 67% higher than in 2005, including the result of Collahuasi .

The total fine copper production of the four mining divisions operated by Anglo
American amounted to 446,784 tonnes, which was a 0.7% increase on 2005.
Collahuasi had total production of 440,019 tonnes of fine copper, a 3% increase on
the previous year.

Anglo American Chile’s total production of fine copper amounted to 640,393 tonnes,
1.4% higher than in 2005. The total molybdenum production was 4,028 tonnes, with
the Los Bronces Division accounting for 2,549 tonnes and the 44% production of
Collahuasi accounting for 1,479 tonnes. Around 85% of the copper produced by Anglo
America is smelted in Chile and is exported as metallic copper.

The Chagres Smelter had record production of 173,413 tonnes of anodes/blister,
which was a 26% increase on 2005. It produced 499,243 tonnes of sulphuric acid,
which was 34.3% higher than the previous year.

20 Anglo American owns 44% of Compañía Minera Doña Inés de Collahuasi.

                                                                                                                        2006 RESULTS ECONOMIC PERFORMANCE

2006 Results
Anglo American Chile’s earnings after tax rose 119% year-on-year to US$2,461.9
million. This increase not only reflects the high copper price but also greater total fine
copper output and cost savings.

Total taxes amounted to US$1,139.8 million, with first category tax accounting for
US$465.2 million, the additional profit remittance tax accounting for US$541.5 million,
and the mining royalty for US$133.2 million. More than three times the tax was paid in
2006 compared with the US$310 million in 2005.

US$181 million were invested in different operational projects in 2006, an increase
on the US$123 million in 2005, mainly to increase the life of operations or to optimise
processes. The social investment in 2006 was US$1.5 million, which was a 14.6%
increase on the US$1.3 million in 2005.

Main Results (millions of US$)
                                                             2006                            2005                                        2004

Anglo American Net Income                                  2,960.9                         1,890.7                                    1,461.6

Collahuasi Net Income (44%)                                1,442.3                           751.1                                      640.2
Total Income before taxes                                  4,403.2                           2,642                                      2,102

Total Taxes                                                1,139.8                            243                                         53.2

Anglo American Earnings                                    1,684.7                           800.2                                      638.4

Collahuasi Earnings                                           777.2                          325.6                                      282.9

Total Earnings                                             2,461.9                         1,125.8                                      921.3

Anglo American fine copper production (tonnes)              446,784                         443,460                                  455,375

Collahuasi fine copper production (tonnes)                 193,609                          187,890                                  211,629

Total production (tonnes)                                 640,393                          631,350                                   667,004

Operating Cost (US$c/lb)                                      89.8                            73.2                                        61.3

Capital Investments                                            181                            123                                          115

ROCE                                                         155%                             75%                                         46%

Average copper price (US$c/lb)                               305.3                           167.1                                      130.1

                                                                                                SUSTAINABLE DEVELOPMENT REPORT   ANGLO AMERICAN CHILE   89

Suppliers and
The Principles of Good Corporate Citizenship extend to contractors and suppliers,
who had to sign a clause of adherence to these principles in the contracts entered
into with them in 2006.

The company had commercial relations with 1,131 suppliers in 2006 and requested
the services of 600 contractor companies, which generated 3,118 indirect jobs
(749 services, 1,518 operations and 851 project jobs) in 2006. As of December
2006, 98% of the supplier payments were made within the terms agreed on. 1.04%
was made within the next 60 days and 0.87% before 90 days. Only 0.09% of the
payments were totally out of the ordinary, generally because of withholding due to the
contractor’s fault, according to the internal audit data.

Likewise, the Mantos Blancos and Mantoverde divisions started to use Quadrem’s
QMarket tool, joining other operations that were already using it. A supplier
classification was made and those not registered in Quadrem were invited to do so to
bolster the commercial transactions through this platform.

This mechanism reduces the transaction costs and improve the response times
generating faster negotiation processes and offering more competitiveness,
transparency and equal opportunities.

The Mantos Blancos Division also uses the Goods and Services Supplier Company
Classification System (SICEP), which is a supplier registry system developed by the
Industrial Association of Antofagasta (AIA) and the mining companies in the region.
It allows for an updated database of suppliers/contractors and their compliance with
legislation, and environmental, social and safety aspects.

At the same time, AIA asked Abastemin of the Mining Council, which includes all the      The Procurement and Contracts area is in
procurement areas in the mining industry, to standardise the safety requirements
for third parties and to include an intellectual property article in the contracts so    charge of the commercial relations with
that contractor maintain ownership over operations innovations. Anglo American           contractors and suppliers. Periodically
considered these clauses in its new contracts according to the standards defined.        it undergoes self-evaluations using a
                                                                                         methodology known as the Supply Chain
Another significant highlight was the publication of the new General Administrative      CI Guidelines, which includes 9 dimensions
Bases, which entails a new contract format in which the main characteristic is that
administrators must require third-party workers to be paid through Previred. The         related to sustainable development, such
objective is to guarantee compliance with labour regulations regarding social security   as hazardous materials, ethical business,
payments and to implement it before the effectiveness of the Subcontracting Law,         waste reduction and the environment,
which came into force on January 14, 2007.                                               among others. This not only enables the
                                                                                         performance of this management area to be
                                                                                         evaluated but also its results to be compared
                                                                                         with other divisions of Anglo Base Metals.

                                                                                                                                SUPPLIERS AND CONTRACTORS ECONOMIC PERFORMANCE

Initiatives with
Commercial Partners
The Chagres Smelter undertook a systematic Supplier                                          Based on the diagnosis made, 259 companies supply the
Development Programme. Mantoverde approved the budget to                                     mining operations, of which 141 are local suppliers and 118
implement similar activities in 2007, considering ten suppliers,                             external. In other words, 54.6% of the purchases made by
and the other divisions carried out ongoing activities with their                            mining companies in Atacama are from local suppliers in the
commercial partners.                                                                         region and the remaining 45.4% from external providers .

Chagres implemented a Supplier Development Programme                                         Moreover, Mantoverde sponsored the II Business “Win-Win”
aimed at training 17 companies that provide supplies and                                     Session, whose aim was to get small and mid-sized companies
services as part of its collaboration policy to boost the                                    closer to mining operations. This is a meeting point for
sustainable development of contractors and raise the service                                 entrepreneurs where they can exchange supply and demand
quality with high performance standards.                                                     for products, services, technology and projects, and the labour
                                                                                             market requirements.
The first diagnosis phase was undertaken by FUNDES and
was co-financed by Anglo American Chile and CORFO . The                                      El Soldado signed four agreements with neighbours in the
aim of this initiative is to increase the competitiveness of the                             areas of Los Caleos (Juan Altamirano and René Blanco)
productive chain, strengthen the stability of the subcontracting                             and Collahue (Jacqueline Morales and Alfonso Ramírez) to
relationship among small and large-sized companies and                                       produce native plants in the next three years with each of
promote the business development of the small and mid-sized                                  them producing 5,000 plants per year. An agreement was also
companies participating in a long-term process, whose results                                reached with the Christa Mock Agricultural School in Nogales
in the future are deemed beneficial for both the suppliers and                               to produce 20,000 native plants a year.
the company using their products/ services.
                                                                                             The propagation is carried out on the division’s land and the
Mantoverde supported a study called “Atacama Supplier                                        neighbours are given technical assistance and most of the
Characterisation Diagnosis,” co-financed by CORFO and the                                    seeds. The agreement was possible due to the interest of
Atacama Region Development Corporation (CORPROA).                                            these neighbours in participating in the programme. The plants
                                                                                             produced will be allocated to the reforestation programmes of
The objective was to characterise suppliers of mining goods                                  the Forestry Stewardship Plans carried out by the El Soldado
and services in Atacama in order to define gaps on the                                       Division and to other regional reforestation programmes.
requirements of the companies requesting such goods and
services. An intervention plan will then be proposed, which
will allow local supply to position itself competitively in the
market, leveraging external factors that are generated with
the productive chain. The intervention will boost small and
mid-sized companies according to the requirements of the
companies requesting services.

23 Complete information in the document published by CORPROA “Mining industry suppliers in
Atacama, Economic Situation Analysis Nº32, May 6, 2004”

                                                                                                                    ANGLO AMERICAN CHILE   SUSTAINABLE DEVELOPMENT REPORT   91
Suppliers of goods and services                                2006
Suppliers of goods                                             1,131
Suppliers of services                                            600
Total suppliers                                                1,731

                                                   National             Foreign     Total
Suppliers of goods                                    1,035                  96     1,131
Suppliers of services                                   555                  45      600
Total                                                 1,590                 141     1,731

Payment to suppliers in 2006 (national and foreign currency)

                                                    National            %         Foreign     %       Total      %
                                                    Currency           Total      Currency   Total              Total
                                                      Ch$                         ThUS$
Suppliers of goods                                  350,603            39.7        16,915    1.9     367,518    41.6
Suppliers of services                               500,472            56.7        15,318    1.7      515,791   58.4
Total                                                851,074           96.4        32,233    3.6     883,309    100

Targets and


  Targets and Commitments
  The table below shows the degree of compliance with the aspects considered in the previous
  report and also exhibits the 2007 commitments.

  Issue                                                         2006 Target


                                                                Maintain zero fatalities                                                                      √
                                                                Zero lost-time accidents                                                                      X
                                                                Implement Golden Rules audit plans                                                            √
                                                                Implement initiatives/shorten the gaps detected in the DuPont diagnosis.                      √
                                                                Complete implementation of the Behaviour-Based Safety Programme at Mantoverde.
                                                                Reinforce in other divisions.                                                                 √
                                                                Maintain the ISO 14000 and OHSAS 18000 integrated certification in all divisions.              √
                                                                Implement the plan to align contractor personnel work standards and conditions.               √

  Occupational Health

                                                                Implement the job position study based on the Work Fitness Programme                          √
                                                                at the Mantos Blancos and Mantoverde divisions.
                                                                Ensure contractor compliance with Anglo American’s occupational health                        √
                                                                and hygiene guidelines.


                                                                Maintain the ISO 14001 and OHSAS 18000 integrated certification in all the divisions.          √
  Tailings dam seepage                                          Continue to improve the control of the Las Tórtolas and El Torito tailings dams.              √

  Alternatives/productive use of tailings water                 Develop the Las Tórtolas pilot project study for the agricultural use of tailings water.      X

  Process water discharges complying with                       Improvements submitted to and approved by the authority before September 2006.                √
  Supreme Decree 90.
  Industrial waste management                                   Approval of the industrial waste management plans.                                            √

  Land use                                                      Define the area to be protected for conservation of the biodiversity at El Soldado.
                                                                The forestation of 7.8 hectares plus the 3 hectares outstanding from 2005 are equivalent to   √
                                                                a total of 10.3 hectares rehabilitated in 2006.
  Chagres emissions                                             Complete implementation of the optimisation project.
  Energy consumption                                            Identify/develop new energy reduction initiatives.
  Water consumption                                             Identify/develop new water consumption reduction initiatives.

  Implementation of key biodiversity action plans               Propagate a further 20,000 Bellotos from seeds.                                               √

                                                                Undertake another project at Yerba Loca.                                                      √
                                                                Carry out studies/research at the old dams for rehabilitation using autochthonous flora.       √

  Closure plans                                                 Complete the next detailed stage of the Mantos Blancos closure plan                           X

  Social Development

  Community Engagement Plans                                    Consolidation/implementation of the 2006 Community Engagement Plans.                          √
                                                                Implement the “open door” concept in all the divisions.
                                                                Publish the second Sustainable Development Report                                             √

                                                                                                                                                          TARGETS AND COMMITMENTS

                                                                  Target achieved: √          Processes being developed:                Target not achieved: X

Action undertaken in 2006                                              2007 Targets

                                                                       Maintain zero fatalities.
The accident rate dropped from 0.4 in 2005 to 0.34 in 2006.            Zero lost-time accidents.
New version of the Golden Rules.                                       Implement the Anglo Safety Way system.
                                                                       Consolidate basic safety processes.
                                                                       Make a follow-up and analysis of the preventive management by means of leadership
                                                                       All the operations must fully comply with the heavy-duty equipment and machinery
                                                                       guidelines in 2007, and the power lockout procedures and practices.

                                                                       Enhance the audit process using Anglo American’s standard reporting protocol and
                                                                       format for findings.
                                                                       Undertake a new work climate survey according to the DuPont scheme.
                                                                       Carry out the pending activities of the Contractor Plan according to the minimal standards
                                                                       and criteria.
                                                                       Maintain the ISO and OHSAS certifications.

                                                                       Ensure contractor compliance with Anglo American’s occupational health
                                                                       and hygiene guidelines.
Compliance close to 100%

                                                                       Maintain the ISO 14000 certification.

The hydrogeological study of the El Torito dam was updated             Continue the studies and improvements of the El Torito tailings dam seepage.
and improved; studies were conducted on the hydrogeological
models of the basin and on the evapotranspiration of the forest
at the Las Tórtolas dam.
                                                                       Improve the forest irrigation system at Las Tórtolas.

The waste management plan was updated in 2006 pursuant
to Supreme Decree 86/70.

The rehabilitation plan was complied with.

Progress was made with complying with the targets                      Identify/develop new initiatives to reduce energy consumption and CO2 emissions.
of the Energy Efficiency Programme.
                                                                       Identify/develop new initiatives to reduce water consumption.

                                                                       Propagate 20,000 Belloto plants.
                                                                       Expansion of the Yerba Loca protection agreement.

                                                                       Update the closure plans in the 5 divisions.

(addressed in the Social Performance chapter)                          Assess and update the Community Engagement Plans.
                                                                       Continue the “Open Door” concept in all the divisions.
                                                                       Publish the third Sustainable Development Report.
                                                                       Implement a support programme for small and medium-sized business in the 5 divisions.

                                                                                                                      SUSTAINABLE DEVELOPMENT REPORT   ANGLO AMERICAN CHILE    95
                                                                                                                                              APPENDIX 1

Appendix 1
Legal System and Ownership
                                                                   exploration and exploitation. Mantos Blancos participates in this
Minera Sur Andes Limitada was established as a corporation         company indirectly through its stake in Minera Anglo American
by means of a public deed issued by the Santiago Notary            Chile Limitada. The latter company owns 50% of the capital
of Mr. Eulogio Altamirano, on September 6, 1916. The folio         stock of Compañía Minera Anglo Cominco Limitada.
of its excerpt was registered on sheet 793 Nº406 of the
Santiago Commerce Registry of the Real Estate Registrar            Minera Sur Andes Limitada has a stake in Anglo American
the same year. Its current and only partners are Inversiones       Chile Limitada, engaged in providing management, planning and
Anglo American Sur Limitada with 99.9% of the capital stock,       consultancy services. 70% stake of the capital stock.
and Anglo American Sur S.A. with the remaining 0.1%, and
both are subsidiaries of Anglo American plc. Empresa Minera
de Mantos Blancos S.A. was established as a corporation by         Corporate Governance of Related
means of a public deed issued by the Santiago Notary of Mr.
Jaime García Palazuelos, on October 19, 1955, and the excerpt      Companies
of its folio was registered on sheet 6.101 Nº3.598 of the
Santiago Commerce Registry the same year. Its capital stock        Empresa Minera de Mantos Blancos S.A. has a board made
is divided into 157,847,925 registered non-par-value shares        up of three incumbent directors and three alternate directors.
of a single series, of which approximately 99.98% belong to        There is also a General Manager appointed by the company
Anglo American plc’s subsidiary companies called Inversiones       board, and John Dyer Hopwood holds this position.
Anglo American Norte Limitada, Minorco Inversud S.A., and
Inversiones Minorco Chile S.A. To leverage the synergies arising
from the work of two copper-producing companies with similar
products, and especially with human resources that could work         INCUMBENT DIRECTORS                         ALTERNATE DIRECTORS
in either company, it was decided to form Anglo American Chile
Limitada pursuant to a public deed, dated March 14, 2003,             Pieter Louw                                 Felipe Purcell
issued by the Santiago Notary of Mr. Andrés Rubio Flores,             John Dyer                                   Gastón Véliz
whose folio excerpt was registered on sheet 7.114 Nº5.596 of          Eduardo Muñoz                               Lorenzo Menéndez
the Santiago Commerce Registry in the same year.

Subsidiaries, Affiliates and Related                               Minera Sur Andes Limitada has a board made up of 5
Companies                                                          incumbent directors and 5 alternate directors.

Empresa Minera de Mantos Blancos S.A. has a stake in the
following companies:                                                  INCUMBENT DIRECTORS                         ALTERNATE DIRECTORS
                                                                      Pieter Louw                                 Alejandro Mena
a) Minera Anglo American Chile Limitada, engaged in mine
exploration and exploitation, the purchase and sale of mining         Miguel Angel Durán                          Lorenzo Menéndez
claims. 57.22% stake of the capital stock.                            John Dyer                                   Claus Bunger
b) Minera Santa Rosa SCM, engaged in the exploration,                 Felipe Purcell                              Gustavo Tapia
development and exploitation of mining claims. 25.12% stake of        Robert Cunnigham                            Ignacio Quiñones
the capital stock.
c) Anglo American Chile Limitada, engaged in providing
management, planning and consultancy services in various
areas. 30% stake of the capital stock.
d) Compañía Minera Anglo Cominco Limitada, engaged in mine

                                                                                           ANGLO AMERICAN CHILE    SUSTAINABLE DEVELOPMENT REPORT     97

Appendix 2
All the material consulted and the list of interviewees that participated in this project have been included to make the 2006
Sustainable Development Reporting process more transparent.

Internal documents consulted                                    External documents consulted

2005 & 2006 Annual Reports.                                     Golder Report: diagnosis of the water resources of the Copiapó

2005 & 2006 Sustainable Development Reports.                    2006 Global Accountability Report – One World Trust.

The company’s articles of association.                          SEAT 2003 Reports of all the divisions issued by Casa de la Paz.

The Board’s book of minutes.                                    Anglo American plc SD Assurance 2006 presentation – site close
                                                                out meeting drawn up by KPMG.

Corporate Emergency Response Plan.                              SAM Benchmarking Report.

Principles of Good Corporate Citizenship.                       2006 Mining and Biodiversity. Document by the National Mining

Letter of Assurance.                                            Chilean Mining Pulse 2006 – Document by Mori and the Catholic
                                                                University of Chile.

SEAT and new tools.                                             Report on the Evaluation of External Service Company Labour
                                                                Relations – IR Consulting.

2005 & 2006 Community Engagement Plans.

Bulletin on Integrated Risk Management
(IRM – framework for Integrated Risk Management).

Agreement with the Esperanza Foundation.

“Product” definition procedure.

Angloworld corporate newsletters Nº25 & 27

Welcome manual “Welcome to building one of the most valued
and respected copper businesses in the world.”

Cultural Model: Summit Project.

Feedback on the results of the work climate survey.

Safety, occupational health and environmental database

Los Bronces Development Project leaflet

Los Bronces, El Soldado, Mantos Blancos, Mantoverde and the
Chagres Smelter collective bargaining agreements.

Documents on handling hazardous substances.

                                                                                                              APPENDIX 2


1.    Alejandro Mena,
      Vice-President Human Resources

2.    Lorenzo Menéndez,
      Senior Manager Safety & Sustainable Development

3.    Juan Alberto Ruiz,
      Senior Manager Procurement & Contracts

4.    Mauricio Bianchi,
      Senior Manager Marketing

5.    Fernando Valenzuela,
      Environmental Manager

6.    Ignacio Quiñones,
      Legal Affairs Manager

7.    Carlos Wilhelm,
      Safety Manager

8.    Carlos Cruces, Gerente de Ingeniería de Materiales,
      Warehousing & Logistics Manager

9.    Hernán Gómez,
      Procurement & Contracts Manager

10.   Benjamín Galdames, Gerente de Relaciones
      Organisational Effectiveness Manager

11.   Oscar Torres,
      Human Resources Administration Manager

12.   Ferrucio Medici,
      Maintenance & Energy Advisor

13.   Christian Clark,
      Sustainable Development Advisor

14.   Graciela Bustamante,
      Management Control Advisor

15.   Jorge Poblete,
      Social & Economic Development Advisor

                                                            NGLO AMERICAN CHILE   SUSTAINABLE DEVELOPMENT REPORT     99

Global Reporting
Reporting Initiative

Global Reporting Initiative Index / Global Compact Principles
Vision and Strategy
GRI Indicator                                                                                           Global Compact Principle                                                          Page Nº

1.1 Organisation vision and strategy.                                                                   Nº8: Undertake initiatives to promote greater environmental responsibility.         4 & 24
1.2 Message from the CEO.                                                                                                                                                                        4

GRI Indicator                                                                                           Global Compact Principle                                                          Page Nº

2.1       Name of the organisation.                                                                                                                                                            10
2.2.      Primary products and services.                                                                                                                                                    10-15
2.3       Operational structure of the organisation.                                                                                                                                           14
2.4       Description of the main divisions, operating companies, subsidiaries and joint ventures.                                                                                               6
2.5       Number of countries where the organisation operates.                                                                                                                                   8
2.6       Legal form.                                                                                                                                                                          97
2.7       Markets served.                                                                                                                                                                   11-12
2.8       Scale of the reporting organisation.                                                                                                                                                 10
2.9       List of stakeholders.                                                                                                                                                             28-29
2.10      Contact person for related issues.                                                                                                                                                Pocket
2.11      Reporting period.                                                                                                                                                                      6
2.12      Date of most recent previous report.                                                                                                                                                   6
2.13      Scope of the report.                                                                                                                                                                   6
2.14      Significant changes in the organisation.                                                                                                                                             N/A
2.15      Basis for reporting on subsidiaries.                                                                                                                                                 10
2.16      Explanation of the effect of any re-statements of information provided in earlier reports.                                                                                             6
2.17      Decision of not applying GRI principles.                                                                                                                                            N/A
2.18      Criteria and definitions used                                                                                                                                                    Footnote
2.19      Significant changes in the calculation method.                                                                                                                                       N/A
2.20      Policies and practices to guarantee accuracy, thoroughness and veracity.                                                                                                               6
2.21      Policy and current practices with regard to seeking external assurance for the report.                                                                                                 6
2.22      Means by which users can find additional information.                                                                                                                          6/footnote

Governance Structure and Management Systems
Elemento GRIGRI Indicator                                                                               Global Compact Principle                                                          Page Nº

3.1       Governance Structure.                                                                                                                                                                20
3.2       Percentage of non-executive independent directors.                                                                                                                                  N/A
3.3       Process for determining the expertise of directors.                                                                                                                                  20
3.4       Procedures for identifying and managing economic, environmental and social
          opportunities and risks.                                                                                                                                                              24
3.5       Linkage between direct compensation and the achievement of the financial and
          non-financial objectives.                                                                                                                                                            N/A
3.6       Organisational structure.                                                                                                                                                            22
3.7       Statements of mission and values, principles, codes of conduct, and policies relevant
          to environmental, social, and economic performance.                                                                                                                               Report
3.8       Mechanisms for shareholders to provide recommendations to the Board.                                                                                                                N/A
3.9       Process for defining stakeholders.                                                                                                                                           Not reported
3.10      Methods for consulting interested parties.                                                                                                                                        28-81
3.11      Type of information generated by stakeholder concerns.                                                                                                                      2005 Report
3.12      Use of the information obtained as a result of stakeholder commitments.                                                                                                           28-81
3.13      Explanation of the use of the precautionary principle.                                        Nº7: Businesses should support a precautionary approach to
                                                                                                        environmental challenges.                                                      Not reported
3.14      Economic, environmental, and social commitments, principles, or other voluntary initiatives
          to which the organisation subscribes.                                                                                                                                             30-31
3.15      Membership of business/industry associations.                                                                                                                                        32
3.16      Policies and/or systems for managing impacts caused by processes prior to and after
          those of the organisation.                                                                                                                                                            24
3.17      Organisation’s focus on the management of the indirect economic, environmental and
          social impacts of its activities.                                                                                                                                                     24
3.18      Main decisions made during the reporting period regarding the location or modification
          of operations.                                                                                                                                                                     N/A
3.19      Programmes and procedures regarding economic, environmental and social performance.                                                                                         33-34/61-92
3.20      Certification status of economic, environmental and social management systems.                                                                                                        25

                                                                                                                                                                          GLOBAL REPORTING INITIATIVE INDEX

Economic Performance
GRI Indicator                                                                                          Global Compact Principle                                                                   Page Nº

EC1.    Net sales.                                                                                                                                                                                  10 & 89
EC2.    Geographical breakdown of markets for each product.                                                                                                                                         10 & 11
EC3.    Costs of all raw materials and goods purchased, and all the services hired.                                                                                                                       92
EC4.    Percentage of contracts paid pursuant to agreed terms.                                                                                                                                            90
EC5.    Total payroll.                                                                                                                                                                              Strategic
EC6.    Distribution to capital providers, broken down by interest on debt and borrowings, and
        dividends from shares of any kind.                                                                                                                                                    Not reported
EC7.    Retained earnings at the end of the period.                                                                                                                                                     89
EC8.    Total sum of taxes of all types paid.                                                                                                                                                           89
EC9.    Subsidies received.                                                                                                                                                                           N/A
EC10.   Donations to the community in cash and kind, broken down by types of group.                                                                                                                     82
MM1.    Identify those sites where the local economic contribution and development impact is
        of particular significance and interest to stakeholders.
MM2.    Value added (total earnings minus total acquisition cost).                                                                                                                                  89 & 92

Environmental Performance
GRI Indicator                                                                                          Global Compact Principle                                                                   Page Nº

EN1.    Total consumption of raw materials.                                                            Nº8: Undertake initiatives to promote greater environmental responsibility.                        62
EN2.    Percentage of raw materials used that are waste.                                               Nº8: Undertake initiatives to promote greater environmental responsibility.                        62
EN3.    Direct energy consumption by primary energy source.                                            Nº8: Undertake initiatives to promote greater environmental responsibility.                        37
EN4.    ndirect energy consumption.                                                                    Nº8: Undertake initiatives to promote greater environmental responsibility.                        37
EN17.   Initiatives for using renewable energy sources.                                                Nº8: Undertake initiatives to promote greater environmental responsibility.
                                                                                                       Nº9: Encourage the development and diffusion of environmentally-friendly technologies.            40
EN5.    Total water withdrawal.                                                                        Nº8: Undertake initiatives to promote greater environmental responsibility.                       64
EN6.    Location and size of land owned by the company with high biodiversity value.                   Nº8: Undertake initiatives to promote greater environmental responsibility.                    72-75
EN7.    Analysis of significant impacts of activities, and/or products and services on biodiversity
        in land, saltwater and freshwater environments.                                                Nº8: Undertake initiatives to promote greater environmental responsibility.                    72-75
EN23.   Total amount of land or property for production activities or extractive use.

1.      Total land disturbed and not yet rehabilitated.
2.      Total amount of land newly disturbed within the reporting period.
3.      Total amount of land newly rehabilitated within the reporting period.                                                                                                                         72-75
MM3.    The number of sites identified as requiring biodiversity management plans, and the
        number of sites with plans in place.                                                                                                                                                          72-75
EN25.   Impacts caused by activities or operations in protected and sensitive areas.                                                                                                                  72-75
EN26.   Changes to natural habitats as a result of activities and operations, and percentage
        of protected or restored habitats.                                                                                                                                                            72-75
EN27.   Programmes and objectives to protect and restore ecosystems and autochthonous
        species in degraded zones.                                                                                                                                                                    72-75
EN8.    Greenhouse gas emissions.                                                                      Nº8: Undertake initiatives to promote greater environmental responsibility.                    37-67
EN9.    Use and emissions of ozone-depleting substances.                                               Nº8: Undertake initiatives to promote greater environmental responsibility.                       67
EN10.   NOx, SOx, and other significant air emissions by type.                                          Nº8: Undertake initiatives to promote greater environmental responsibility.                       67
EN11.   Total weight of waste by type.                                                                 Nº8: Undertake initiatives to promote greater environmental responsibility.                    69-71
EN12.   Significant spills into watercourses (by amount or impact).                                     Nº8: Undertake initiatives to promote greater environmental responsibility.                       65
EN13    Chemical, oil and fuel spills.                                                                 Nº8: Undertake initiatives to promote greater environmental responsibility.                       78
EN31.   Any production, transport, import or export of hazardous waste.                                                                                                                               70-71
EN14.   Significant environmental impacts of main products.                                             Nº8: Undertake initiatives to promote greater environmental responsibility.                       78
EN15.   Percentage weight of products sold that are reclaimed at the end of their life.                Nº8: Undertake initiatives to promote greater environmental responsibility.
EN16.   Events and fines for non-compliance with agreements /treaties / declarations.                   Nº8: Undertake initiatives to promote greater environmental responsibility.                    None
EN35.   Total environmental protection expenditures.                                                                                                                                                     62
MM4.    Percentage of products derived from secondary materials (excluding internal recycling).                                                                                                          70
MM5.    Describe policies for assessing the eco-efficiency and sustainability attributes of products.                                                                                                     27
MM6.    Describe the approach to management of overburden, rock, tailings/waste, and sludge.                                                                                                        66 & 69

                                                                                                                                            ANGLO AMERICAN CHILE   SUSTAINABLE DEVELOPMENT REPORT       101

Social Performance
GRI Indicator                                                                                         Global Compact Principle                                                               Page Nº

LA1.     Breakdown of workforce by regions/status (employees-non-employees),
         employment type (full-time-part-time), employment contract (indefinite-term).                                                                                                         42-43
LA2.     Net employment creation and average turnover.                                                                                                                                       42 & 89
LA3.     Percentage of employees represented by trade union organisations.                             Nº3: Businesses should uphold the freedom of association
                                                                                                       and the effective recognition of the right to collective bargaining.                        47
LA4.     Policy and procedures on information, consultation and negotiation with employees.            Nº3: Businesses should uphold the freedom of association and the effective
                                                                                                       recognition of the right to collective bargaining.                                         47
LA5.     Methods of recording and notifying work accidents and occupational diseases.                                                                                                             58
LA6.     Describe joint management and trade union health and safety commissions.                                                                                                                 56
LA7.     Rates of absenteeism, work accidents and injury, days lost and number of fatalities.                                                                                                  54-55
LA8.     Describe policies or programmes on HIV/AIDS.                                                                                                                      Good Corporate Citizenship
LA9.     Average hours of training per year by employee category (executive, operator, technician).                                                                                               43
LA10.    Describe equal opportunity programmes and policies.                                           Nº6: The elimination of discrimination in respect of employment and occupation.        9 & 48
LA11.    Composition of senior management and corporate governance bodies, including gender
         ratio and other indicators of diversity.                                                      Nº6: The elimination of discrimination in respect of employment and occupation.         9 & 43
HR1.     Policies, guidelines, corporate structure and procedures on human rights.                     Nº1: Businesses should support and respect the protection of internationally
                                                                                                       proclaimed human rights.                                                                    48
HR2.     Evidence that human rights are considered in the company’s strategy.                          Nº1: Businesses should support and respect the protection of internationally
                                                                                                       proclaimed human rights.
                                                                                                       Nº2: Make sure that they are not complicit in human rights abuses.                    30 & 48
HR3.     Policies and procedures to assess human rights performance within the supply chain            Nº1: Businesses should support and respect the protection of
         and contractors.                                                                              internationally proclaimed human rights.
                                                                                                       Nº2: Make sure that they are not complicit in human rights abuses.                 30, 90 & 91
HR4.     Global policies and programmes to prevent discrimination.                                     Nº1: Businesses should support and respect the protection of internationally
                                                                                                       proclaimed human rights.
                                                                                                       Nº6: The elimination of discrimination in respect of employment and occupation.     42, 44, 48
HR5.     Describe the freedom of association policy and the extent to which it is applied.             Nº3: Businesses should uphold the freedom of association and the effective
                                                                                                       recognition of the right to collective bargaining.                                      47, 48
HR6.     Describe the policy of anti-child labour.                                                     Nº5: The effective abolition of child labour.                                               48
HR7.     Statement of the policy against forced or compulsory labour.                                  Nº4: The elimination of all forms of forced and compulsory labour.                          48
SO1.     Describe the management policies of the impacts on communities in regions affected by
         activities (support for local development, workforce training, and biodiversity projects).                                                                                            61-86
SO2.     Describe the management systems/compliance procedures on corruption and bribery.              Nº10: Businesses should work against corruption in all its forms, including
                                                                                                       extortion and bribery.                                                                  21-44
SO3.     Describe the management systems/compliance procedures addressing contributions
         and political lobbying.                                                                                                                                                                  21
SO7.     Describe the management systems to prevent anti-competitive behaviour.                                                                                                                21-44
PR1.     Describe the policy on the customer’s health and safety during the use of the product.                                                                                                   12
PR2      Describe the policies and management systems on product labelling and description.                                                                                                       12
PR3.     Describe the policies and management systems on customer privacy.                                                                                                                      N/A
MM7.     Describe significant incidents affecting communities during the reporting period, and
         grievance mechanisms used to resolve the incidents and their outcome.                                                                                                                      78
MM8.     Describe programmes that address artisanal and small-scale mining.                                                                                                                        84
MM9.     Describe resettlement policies and activities, transfer of camps, transfer indemnity.                                                                                       N/A in the period
MM10.    Number or percentage of operations with closure plans, covering social, environmental and
         economic aspects.                                                                                                                                                                         75
MM11.    Describe the process for identifying local communities’ land and customary rights of local
         communities, and grievance mechanisms used to resolve any disputes.                                                                                                                       76
MM12.    Describe the approach to identifying, preventing, and responding to emergency situations
         affecting employees, local communities, or the environment.                                                                                                                               57
MM13.    Number of cases of occupational disease by type. Describe programmes to prevent
         occupational disease.                                                                                                                                                                 58-59

We are interested in your opinion
To improve next year’s report, we would like to know your opinion and therefore ask you to
complete this questionnaire on our website

1.     What interest group do you belong to?

___ Shareholders                     ___ Suppliers and Contractors
___ Customers                        ___ Authorities
___ Workers                          ___ Community in general

2.     What is your opinion about the 2006 Sustainable Development Report?

2.1. In general terms:

____   The information is provided comprehensibly and with an orderly structure.
____   The information is provided comprehensibly but disorderly.
____   The information is not provided very comprehensibly but is orderly.
____   The information is not provided very comprehensibly and is disorderly.

2.2. Concerning the content:

___    I consider it provides all the information I need.
___    I consider the information provided is not what I need.
___    I consider the information is provided impartially.
___    I consider the information provided is partial.

3.    If you consider the information provided is not what you need, help us to
improve our next report by letting us know what kind of information you would
like to see in our report.

4.     Comments or suggestions

Thank you very much for your time

                                                       SUSTAINABLE DEVELOPMENT REPORT   ANGLO AMERICAN CHILE   103
                                                                                                                                       Associated steps

      SEAT                                                                                                       STAGE 1:
                                                                                                            Profile the mining
                                                                                                               operations of
                                                                                                                                        STEP A:
                                                                                                                                        Profile the mining operations of Anglo American

                                                                                                                                        STEP B:
                                                                                                             Anglo American
                                                                                                         and related communities.       Profile the community and start engagement with key
      Anglo American Chile applied                                                                                                      stakeholders to identify core issues.
      the socio-economic assessment

      toolbox (SEAT) with the support
      of Casa de la Paz to the
      communities around the divisions.
      The objective of this instrument
      was to raise comprehension
      of the expectations and
      requirements of these

      Anglo American launched a
      new version of this instrument
      in 2006, SEAT II, to improve the
      process in the light of situations
      that were a constant factor in
      all its operations, like the local
      health problems, the search                                                                                                       STEP C:
      for synergy in infrastructure                                                                                                     Identify and assess the social and economic impacts of
                                                                 Continuous Improvement and Engagement

      investments, resettlement                                                                                                         the mining operations and assess existing management
                                                                                                                  STAGE 2:              measures and social investment initiatives.
      planning, and the development of
                                                                                                          Identify & assess social
      local skills.                                                                                        and economic impacts         Paso D:
                                                                                                           and share results with       Share results of impact assessment (quantitative
      The toolbox and the process                                                                              stakeholders.            and qualitative) with stakeholders and obtain
      were commended by the judges                                                                                                      recommendations for management of issues.

      of the World Business Awards,
      which are jointly presented by
      the International Chamber of
      Commerce, the United Nations
      Development Programme and the
      International Business Leaders
      Forum for the support they
      provide to the UN Millennium
      Development Goals (MDGs).

                                                                                                                                        STEP E:
                                                                                                                                        Develop a management and supervision plan for key
                                                                                                                                        issues, including formulation of key performance
                                                                                                                                        indicators (KPIs) on a lower scale.
                                                                                                                  STAGE 3:
                                                                                                           Develop management
                                                                                                                                        STEP F:
                                                                                                          responses to key issues,
                                                                                                                                        Improve the application and contribution of non-core
                                                                                                         including closure planning.

                                                                                                                                        STEP G:

                                                                                                                                        Post-closure planning

                                                                                                                 Etapa 4:               STEP H:
                                                                                                         Report the results of the      Prepare a report summarising the assessment
                                                                                                              assessment.               conclusions and stakeholder feedback contribution.

    Key question to ask at each stage                                Tools to answer the questions
        Do you have a profile of your mining operation?               Tool A1: Mining operation profile

                                    yes                         No
                                                                      Tool B2: Building a basic community profile.
     Do you have a profile of your associated communities?
                                                                No    Tool B5: Overview and guidance on baseline formulation.
            Do you know all your key stakeholders?
                                    yes                         No    Tool B1: Stakeholder identification and gap analysis.
     Do you understand all the ways in which you might impact
          upon the community, positively and negatively?
                                                                No    Tool B3: Overview of potential issues and possible causes.

    Are you confident that you know the best ways to consult
    your community, including the key questions to be asked?    No    Tool B4: Guidance on possible consultation approaches.

       Do you know what questions to ask stakeholders?                Tool B5: Guidance on generic questions to be asked during
                                                                No    consultation.
       Do you understand the relationship between on-site             Tool C1: Identification of Anglo American’s activities that have
               activities and community impacts?                No    social and economic impacts.
     Do you have a framework for analysing and assessing              Tool C2: Assessment of issues raised during the consultation
       issues raised by stakeholders during consultation,             process.
                 qualitatively and quantitatively?              No
      Do you know your mining operation’s value added
                   to the domestic economy?                           Tool C3: How to calculate a mining operation’s value added.

     Do you know the total payments your mining operation
                                                                      Tool C4: Inventory of all payments made to the public sector.
                 makes to the government?                       No
       Do you know the total number of jobs your mining               Tool C5: Calculating total employment generated by your mining
           operation creates, both on- and off-site?            No    operation.

                                                                      Tool C1: Identification of Anglo American’s activities that have
                                                                      social and economic impacts.
        Have you evaluated the effectiveness of existing              Tool C6: Identification and assessment of existing community
         management measures and social initiatives?            No    social investments.
                                                                      Tool C7: Guidance on assessing performance in relation to
                                                                      corporate policies.

                                                                      Tool B4: Guidance on possible consultation approaches.
               Have you shared the results of the
                assessment with stakeholders?                   No    Tool D1: Sharing SEAT process results with stakeholders.

       Have you developed a management plan for social
        and economic impacts and identified measures                  Tool E1: Development of a management and monitoring plan.
                      to track progress?                        No    Tool E2: Development of local key performance indicators.

                                                                      Tool F1: Increase in local purchases and outsourcing to support

          Have you developed your own guidance for                    the development of local companies.
        establishing initiatives to improve your social and           Tool F2: Establishment of new community social investment
                     economic contribution?                     No    initiatives.
                                    yes                               Tool F3: Development of human capital.
                                                                      Tool F4: How to establish partnerships.
          Do you have plans for the eventual closure or               Tool G1: Guidance on closure planning/planning for the
        downsizing of your mining operation (for foreseen             future.
           closure, i.e., for mines or as a contingency)?       No

        Do you have a standardised reporting model for
       documenting and disseminating the results of your
      assessment of social and economic impacts and the               Tool H1: Operation profile template.
                  management measures?                          No

                                                                                                     SUSTAINABLE DEVELOPMENT REPORT   ANGLO AMERICAN CHILE   105
Design / Production
People Marketing Group
Advice on the use of GRI guidelines
Yasmina Zabib M.
Anglo American Chile
Av. Pedro de Valdivia 291
CP 750-0524 - Providencia, Santiago
Telephone (56-2) 230 6000
Fax (56-2) 230 6551

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